ETF Report: First Trust Energy Infrastructure Fund (FIF)

What this ETF is trying to do

The First Trust Energy Infrastructure Fund, known by its ticker symbol FIF, is an exchange-traded fund (ETF). This type of fund allows investors to access a group of companies related to energy infrastructure through a single investment on the NYSE.

What the numbers show

As of May 3, 2024, the current price of one share is $18.10. Looking back at the past year, this fund has seen significant growth. The price of the fund rose by about 30.03% over the last twelve months. When you include the money paid out to investors, the total return for the year was 40.55%.

To see how much a price change matters, imagine you invested $10,000 into this fund exactly one year ago when the estimated price was $13.92 per share. Before any extra payments were added, your $10,000 would have grown to roughly $13,002 based on the current price of $18.10.

Income and distribution explanation

Some investors look for ETFs that pay them regular money, which is called a "distribution." This fund has a distribution yield of about 6.91%. Over the last 12 months, it made 12 payments, meaning it usually pays out money every month. The trailing distribution amount was $1.25 per share.

It is important to remember that a high yield alone can be misleading. A high percentage might look attractive, but you must also look at whether the actual price of the fund is staying healthy.

NAV erosion explanation

"NAV erosion" happens when the value of the underlying assets in the fund drops significantly over time. If an ETF's share price falls from a high number to a much lower number, it can destroy your "principal." Principal is the original amount of money you put in. If the price collapses, even if the fund pays you monthly income, you might end up with less total money than you started with because the share price dropped so much.

In the case of FIF, no price erosion was detected. The data shows a "good" status for erosion, meaning the price has been growing rather than shrinking.

Pros

• The fund has shown strong growth over the last year (40.55% total return).

• It provides regular monthly income.

• The price has increased significantly over the last three years.

Cons

• Investors must monitor if the high yield is sustainable.

• Energy infrastructure can be a specific sector that changes with market needs.

Beginner takeaway

Income investors usually prefer ETFs that go sideways (stay at the same price) or move slightly up. They prefer this because it means their original investment stays safe while they collect the monthly payments. If an ETF's price collapses, the income might not be enough to make up for the lost money. For FIF, the data shows the price has been moving up rather than collapsing.