ETF Education Report: First Trust Energy Infrastructure Fund (FIF)

What this ETF is trying to do

The First Trust Energy Infrastructure Fund (ticker: FIF) is an Exchange Traded Fund (ETF) listed on the NYSE. While the specific investment strategy is not detailed in the provided data, ETFs like this generally aim to provide exposure to specific sectors or themes.

What the numbers show

It is important to understand the difference between "price return" and "total return." Price return only tracks how much the share price changes. Total return includes both the price change and the money paid out through distributions.

Based on the data as of May 3, 2024:

• Year-to-Date (YTD): The YTD price return is approximately 9.96%. The YTD total return is higher, at approximately 13.51%.

• One Year: The one-year price return is approximately 30.03%. The one-year total return is approximately 40.55%. To understand this, we can look at the estimated price from roughly one year ago, which was approximately $13.92.

• Three Year: The three-year price return is approximately 43.31%, while the three-year total return is approximately 73.22%.

Income and distribution explanation

This ETF provides cash distributions to investors. The distribution yield is approximately 6.91%. This number describes the cash payments relative to the current ETF price. The fund usually pays out distributions monthly, with 12 payouts recorded over the last 12 months. Each trailing distribution was $1.25.

It is important to remember that a high distribution yield does not mean the investor earned that exact percentage as their total return. Total return is the most complete way to see how much value was actually gained.

NAV erosion explanation

"NAV erosion" refers to a situation where the value of the underlying assets in the fund decreases over time. When an ETF's share price falls significantly, it can be a sign of price deterioration.

For this fund, the erosion-risk score is 100, and the erosion label is "No price erosion detected." The erosion severity is rated as "good," and there is no severe erosion-risk flag. This means the data does not show signs of significant price deterioration or risk to the fund's value.

Pros

• The fund has shown positive price returns over the one-year and three-year periods.

• The total return figures are higher than the price return figures, showing that distributions have added value.

• The fund provides regular monthly cash distributions.

Cons

• No top holdings were provided in the data, so the specific companies owned by the fund are unknown.

• Investors should always remember that past performance does not guarantee future results.

Beginner takeaway

When looking at an ETF, don't just look at the distribution yield. Always compare the price return to the total return to see the full picture of how the fund is performing. In this case, the total returns are higher than the price returns, meaning the distributions have contributed to the overall growth.