Share-split context: A reverse split was recorded on May 3, 2016 with coefficient 0.2. A reverse split combines multiple old shares into fewer new shares and mechanically raises the quoted price per share. That mechanical increase does not restore lost investment value. The returns in this report are already split-adjusted, while reverse-split history remains a separate structural warning.

ETF Education Report: FIRST TRUST INDXX GLOBAL AGRICULTURE ETF (FTAG)

What this ETF is trying to do

The FIRST TRUST INDXX GLOBAL AGRICULTURE ETF (FTAG) is an exchange-traded fund that focuses on the agriculture industry. It holds a variety of companies involved in global farming and related businesses. Because this is a partial list, we can only see some of its 60 total holdings. The top holdings include:

• DEERE & CO (10.64%)

• BAYER AG (9.96%)

• CORTEVA INC (9.58%)

• BASF SE (9.47%)

• MAHINDRA & MAHINDRA LTD (4.48%)

• NUTRIEN LTD (4.35%)

• BUNGE GLOBAL SA (4.15%)

• KUBOTA CORP (3.91%)

• WILMAR INTERNATIONAL LTD (3.61%)

• CF INDUSTRIES HOLDINGS INC (3.59%)

Please remember that holdings can change over time.

What the numbers show

When looking at how an ETF performs, it is important to look at two different types of returns: price return and total return. Price return only tracks how much the share price moves. Total return includes both the price movement and any cash distributions paid out to investors.

Based on the supplied data:

• Year-to-Date (YTD): The price return is approximately 9.56%, while the total return is approximately 10.58%.

• One-Year: The price return is approximately 10.57%, while the total return is approximately 11.89%.

• Three-Year: The price return is approximately 13.24%, while the total return is approximately 19.84%.

This ETF has a history of reverse splits. In a reverse split, multiple old shares are combined into fewer new shares. This causes the price per share to rise mechanically, but it does not increase the actual value of the investment.

Income and distribution explanation

This ETF pays out cash to investors, known as distributions. The current distribution yield is approximately 1.17%. This number describes the cash paid out relative to the current share price of $28.80. The ETF usually pays these out quarterly, and it has made 4 payments over the last 12 months.

NAV erosion explanation

"NAV erosion" refers to a decline in the Net Asset Value (the actual value of the assets held by the fund). Some investors worry about erosion because they want to make sure their original investment stays stable while they collect income. For FTAG, the erosion-risk score is 100, and the label states "No price erosion detected." There is no severe erosion-risk flag for this ETF.

Pros

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

• The erosion-risk measurement is rated as "good."

Cons

• The distribution yield is relatively low at approximately 1.17%.

• The fund has a history of reverse splits.

Beginner takeaway

When studying FTAG, it is helpful to distinguish between the share price and the total return. While the share price tells you how much the cost of one unit has changed, the total return gives a fuller picture by including the cash distributions you received. Always remember that a high distribution yield does not guarantee that an investment's value will stay the same.