Understanding the FIRST TRUST NASDAQ OIL & GAS ETF (FTXN)

The FIRST TRUST NASDAQ OIL & GAS ETF (ticker: FTXN) is an exchange-traded fund designed to provide exposure to the oil and gas industry. This ETF focuses on companies involved in energy production and services.

What this ETF is trying to do

FTXN invests in companies within the oil and gas sector. Based on its top holdings, it includes major energy players like ConocoPhillips, Exxon Mobil Corp, and Chevron Corp. The fund holds a total of 44 different companies, though the list provided below shows only the largest ones.

Top Holdings:

• CONOCOPHILLIPS (7.26%)

• EXXON MOBIL CORP (7.10%)

• CHEVRON CORP (7.03%)

• EOG RESOURCES INC (5.60%)

• OCCIDENTAL PETROLEUM CORP (5.23%)

• MARATHON PETROLEUM CORP (5.10%)

• VENTURE GLOBAL INC (4.19%)

• VALERO ENERGY CORP (4.06%)

• DIAMONDBACK ENERGY INC (4.00%)

• DEVON ENERGY CORP (3.52%)

*Note: Holdings can change over time.*

What the numbers show

When looking at how this ETF has performed, it is important to distinguish between price return (the change in the share price) and total return (which includes the value of distributions).

• Year-to-Date (YTD): The price return is approximately 42.51%, while the total return is approximately 44.40%.

• One-Year: The price return was approximately 39.86%, and the total return was approximately 42.80%.

• Three-Year: The price return was approximately 39.61%, while the total return was approximately 50.08%.

• Five-Year: The five-year total return is approximately 129.65%.

To visualize the price change, an investor's share price was estimated to be roughly $28.45 one year ago, compared to the current price of $39.79.

Income and distribution explanation

This ETF provides cash distributions to investors. The current distribution yield is approximately 1.80%. The fund usually pays out on a quarterly basis, having made 4 payments over the last 12 months. While distributions provide cash income, they are separate from the share price movement.

NAV erosion explanation

"NAV erosion" refers to a decline in the Net Asset Value (the actual value of the fund's underlying assets). The supplied data is sufficient to evaluate price erosion, but it does not include enough historical NAV-per-share data to confirm or rule out NAV erosion.

However, regarding price movement, the fund has an erosion score of 100, which is labeled as "No price erosion detected." There is no severe erosion-risk flag for this ETF.

Pros

• Strong Price Growth: The fund has shown significant positive price returns over the one-year, three-year, and five-year periods.

• Positive Total Returns: The total returns are higher than the price returns, meaning distributions have added value to the overall performance.

Cons

• Sector Concentration: Because this ETF focuses on oil and gas, its performance is tied to that specific industry.

Beginner takeaway

FTXN is an ETF focused on the energy sector. It has recently experienced significant growth in both its share price and its total return. While it pays a distribution yield of about 1.80%, investors should remember that price returns and total returns are different measurements.