What this ETF is trying to do

The FIRST TRUST BLOOMBERG NUCLEAR POWER ETF (RCTR) is an exchange-traded fund designed to track the nuclear power sector. It provides investors with exposure to companies involved in nuclear energy. Based on its top holdings, the fund invests in various global companies, including Hitachi Ltd, Constellation Energy Corp, and Doosan Enerbility Co Ltd. Because the list of holdings provided is partial, these represent only some of the 49 total companies held by the fund.

What the numbers show

When looking at RCTR, it is important to distinguish between price return and total return. Price return only tracks how the share price moves, while total return includes the impact of distributions.

• Year-to-Date (YTD): The YTD price return is approximately 0.72%. When including distributions, the YTD total return is approximately 1.18%.

• One-Year Performance: Over the last year, the share price declined by approximately 6.01%. The one-year total return was approximately -5.25%.

• Price Comparison: The current price is $32.67. An estimated price from roughly one year ago was approximately $34.76.

Income and distribution explanation

RCTR provides cash distributions to investors. The distribution yield is approximately 0.82%, which describes the cash paid out relative to the ETF's price. The fund usually pays these distributions on a quarterly basis, with 4 payouts recorded over the last 12 months.

It is important to remember that a distribution yield is not the same as total return. While distributions provide cash income, they do not guarantee that your original investment will stay the same value.

NAV erosion explanation

The term "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.

Regarding price erosion, the fund has an erosion-risk score of 75, which is labeled as "Mild price erosion." This indicates a mild level of share-price deterioration. However, there is no severe erosion-risk flag for this ETF.

Pros

• Sector Exposure: Provides a way to invest in the nuclear power industry through a single fund.

• Diversification: The fund holds 49 different companies, spreading risk across various names like Mitsubishi Heavy Industries and Vistra Corp.

Cons

• Recent Price Decline: The fund has experienced a share-price decline of approximately 6.01% over the last year.

• Lower Income Grade: The fund has an income rating grade of "D," suggesting the distribution levels are relatively low compared to other options.

Beginner takeaway

RCTR allows investors to access the nuclear energy market. While it offers quarterly distributions, the fund has seen some mild price erosion and a negative total return over the past year. Investors should remember that high yields or specific sector focuses come with different types of risks, and price movement is separate from the cash income received.