Understanding the First Trust NASDAQ Transportation ETF (FTXR)

The First Trust NASDAQ Transportation ETF (FTXR) is designed to track the transportation sector. This means it invests in companies that move people and goods, such as airlines, trucking companies, and car makers.

What this ETF is trying to do

FTXR focuses on the transportation industry. By holding a variety of companies in this sector, the ETF aims to provide exposure to how different parts of transportation—like shipping, flying, and driving—are performing in the market.

What the numbers show

The data shows that FTXR has experienced growth in both its share price and its total return over different time periods.

• Year-to-Date (YTD): The price return is approximately 7.97%, while the total return is approximately 8.69%.

• One Year: The price return was approximately 17.69%, and the total return was approximately 18.98%.

• Three Years: The price return was approximately 51.24%, and the total return was approximately 58.93%.

• Five Years: The five-year total return is approximately 45.50%.

It is important to note the difference between these two numbers. The price return only measures how much the share price itself changed. The total return includes both the change in share price and the extra money earned from distributions.

Income and distribution explanation

FTXR provides cash distributions to investors. The current distribution yield is approximately 1.07%. This number describes the cash paid out relative to the ETF's current price.

The fund usually pays these distributions on a quarterly basis. Over the last 12 months, there were 4 payouts. The trailing distributions are approximately $0.45 per share. While distributions provide cash income, they are not the same as total return.

NAV erosion explanation

"NAV erosion" refers to a decline in the Net Asset Value (the actual value of the assets held by the fund). 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, looking at the price-based evidence, the erosion-risk score is 100, which is labeled as "No price erosion detected." The erosion severity is listed as "good," and there is no severe erosion-risk flag.

Top Holdings

The following are the top holdings in the portfolio (note that this list is partial):

• Union Pacific Corp (8.59%)

• General Motors Co (8.14%)

• Ford Motor Co (7.76%)

• Tesla Inc (6.58%)

• United Parcel Service Inc Class B (6.28%)

• United Rentals Inc (5.02%)

• Delta Air Lines Inc (4.78%)

• CSX Corp (4.48%)

• United Airlines Holdings Inc (4.11%)

• American Airlines Group Inc (3.93%)

Pros and Cons

Pros:

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

• It has an income rating grade of "A."

Cons:

• The distribution yield is relatively low at approximately 1.07%.

Beginner takeaway

FTXR offers a way to invest in the transportation industry through a single fund. Investors should remember that price returns and total returns are different, and while the fund pays distributions, a high yield does not guarantee that the share price will stay stable.