ETF Education Report: First Trust New Opportunities MLP & Energy Fund (FPL)

What this ETF is trying to do

The First Trust New Opportunities MLP & Energy Fund (FPL) 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 of the market.

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 to investors through distributions.

Based on the data as of May 3, 2024:

• Year-to-Date (YTD): The YTD price return is approximately 12.79%. The YTD total return is higher, at approximately 15.18%.

• One Year: The one-year price return is approximately 33.10%. The one-year total return is approximately 41.67%. We can estimate the price was roughly $5.83 one year ago compared to the current price of $7.76.

• Three Year: The three-year price return is approximately 36.62%, while the three-year total return is approximately 68.97%.

Income and distribution explanation

This ETF provides cash distributions to investors. The trailing distributions are $0.4125, and the distribution yield is approximately 5.32%. The fund usually pays out monthly, with 11 distributions recorded over the last 12 months.

A distribution yield tells you how much cash is paid out relative to the ETF's price. However, a high yield does not guarantee that an investor will earn that same percentage as a total return.

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 drops significantly, it can be a sign of price deterioration.

For this fund, the erosion-risk score is 100, which is labeled as "No price erosion detected." The erosion severity is rated as "good," and there is no severe erosion-risk flag present.

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, meaning distributions have added value to the overall return.

• The fund provides regular cash distributions (usually monthly).

Cons

• Specific top holdings were not provided in the data to show exactly where the money is invested.

Beginner takeaway

When looking at an ETF, always check both the price return and the total return. The price return tells you how the share price moved, but the total return shows you the full picture by including the cash distributions you received. This fund has shown growth in both its share price and its total return over the measured periods.