First Trust Nasdaq Oil & Gas ETF (FTXN)

Overview

The First Trust Nasdaq Oil & Gas ETF (FTXN) seeks investment results that correspond generally to the price and yield of the Nasdaq US Smart Oil & Gas Index. It focuses on U.S. oil and gas companies selected based on fundamental factors. Asset allocation is concentrated within the energy sector, specifically targeting exploration, production, refining, and transportation.

Reputation and Reliability

First Trust is a well-established ETF provider with a solid reputation. They are known for their innovative and factor-based ETFs.

Management Expertise

First Trust has a dedicated team of investment professionals with experience in managing various ETFs, including sector-specific funds like FTXN.

Goal

The primary investment goal of FTXN is to track the Nasdaq US Smart Oil & Gas Index.

Investment Approach and Strategy

Strategy: FTXN aims to track the Nasdaq US Smart Oil & Gas Index, which uses a proprietary methodology to select and weight oil and gas companies based on fundamental factors.

Composition The ETF primarily holds stocks of U.S. oil and gas companies engaged in exploration, production, refining, and transportation. It does not hold bonds or commodities directly.

Market Share: FTXN has a relatively small market share compared to larger energy sector ETFs.

Total Net Assets (AUM): 15170000

Key Competitors

• XLE
• VDE
• OIH

Competitive Landscape

The energy ETF market is dominated by broad-based ETFs like XLE and VDE. FTXN differentiates itself through its smart beta approach and smaller size which also makes it more volatile than its competitors. FTXN offers a more concentrated exposure to fundamentally sound oil and gas companies but has less liquidity compared to XLE and VDE.

Historical Performance: Historical performance data for FTXN can be found on financial websites and will fluctuate depending on market conditions.

Benchmark Comparison: FTXN's performance should be compared to the Nasdaq US Smart Oil & Gas Index to assess tracking effectiveness. Any difference can be attributed to expense ratio and other fund-specific factors.

Expense Ratio: 0.6

Average Trading Volume

The average trading volume of FTXN is relatively low, potentially leading to wider bid-ask spreads.

Bid-Ask Spread

Due to the lower trading volume, FTXN's bid-ask spread can be wider compared to more liquid ETFs, increasing the cost of trading.

Market Environment Factors

FTXN's performance is heavily influenced by oil and gas prices, global demand, geopolitical events, and regulatory changes affecting the energy sector.

Growth Trajectory

FTXN's growth is dependent on the overall health of the oil and gas industry. Changes to strategy and holdings are infrequent, tied to rebalancing within the index.

Competitive Edge

FTXN's competitive advantage lies in its smart beta approach which aims to identify fundamentally sound oil and gas companies, potentially leading to superior returns. This selection process distinguishes it from market-cap weighted ETFs, offering investors a unique investment strategy. However the smart beta selection has not demonstrated exceptional results compared to market-cap weighting. The fund also differentiates itself by focusing exclusively on the oil and gas sector.

Volatility

FTXN's volatility is high due to its concentration in the energy sector and the inherent price fluctuations of oil and gas commodities.

Market Risk

FTXN is subject to market risk specific to the oil and gas industry, including price volatility, regulatory changes, and environmental concerns.

Ideal Investor Profile

FTXN is suitable for investors who are bullish on the oil and gas sector and are seeking targeted exposure to fundamentally strong companies within the industry.

Market Risk

FTXN is more suitable for investors with a higher risk tolerance and a shorter-term investment horizon due to its volatility. Active traders may find it useful for tactical exposure to the energy sector.

The First Trust Nasdaq Oil & Gas ETF (FTXN) provides focused exposure to fundamentally sound U.S. oil and gas companies, tracking the Nasdaq US Smart Oil & Gas Index. It differentiates itself through its smart beta methodology but has a smaller market share and lower liquidity compared to broader energy ETFs. The ETF is subject to high volatility and sector-specific risks, making it best suited for risk-tolerant investors with a bullish outlook on the energy sector. The ETF's total net assets are approximately 15.17 million USD and its expense ratio is 0.60%.

Data Sources:

• First Trust Website
• ETF.com
• Morningstar
• Yahoo Finance

Disclaimers:

The data and analysis provided are for informational purposes only and should not be considered investment advice. Investment decisions should be based on individual circumstances and consultation with a qualified financial advisor. Market share data is approximate and may vary slightly depending on the source and date.