Should You Invest in the First Trust Natural Gas ETF (FCG)?

Launched on 05/08/2007, the First Trust Natural Gas ETF (FCG) is a passively managed exchange traded fund designed to provide a broad exposure to the Energy - Natural Gas segment of the equity market.An increasingly popular option among retail and institutional investors, passively managed ETFs offer low costs, transparency, flexibility, and tax efficiency; they are also excellent vehicles for long term investors.Investor-friendly, sector ETFs provide many options to gain low risk and diversified exposure to a broad group of companies in particular sectors. Energy - Natural Gas is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 9, placing it in bottom 44%.Index DetailsThe fund is sponsored by First Trust Advisors. It has amassed assets over $451.88 million, making it one of the larger ETFs attempting to match the performance of the Energy - Natural Gas segment of the equity market. FCG seeks to match the performance of the ISE-REVERE Natural Gas Index before fees and expenses.The ISE-Revere Natural Gas Index is an equal-weighted index comprised of exchange-listed companies that derive a substantial portion of their revenues from the exploration and production of natural gas.CostsInvestors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.Annual operating expenses for this ETF are 0.60%, making it on par with most peer products in the space.It has a 12-month trailing dividend yield of 2.51%.Sector Exposure and Top HoldingsETFs offer a diversified exposure and thus minimize single stock risk but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.This ETF has heaviest allocation in the Energy sector--about 98% of the portfolio.Looking at individual holdings, Hess Midstream Lp (class A) (HESM) accounts for about 4.65% of total assets, followed by Western Midstream Partners Lp (WES) and Occidental Petroleum Corporation (OXY).The top 10 holdings account for about 41.61% of total assets under management.Performance and RiskYear-to-date, the First Trust Natural Gas ETF return is roughly 9.99% so far, and was up about 20.47% over the last 12 months (as of 01/17/2025). FCG has traded between $22.62 and $28.34 in this past 52-week period.The ETF has a beta of 1.79 and standard deviation of 32.23% for the trailing three-year period, making it a high risk choice in the space. With about 44 holdings, it has more concentrated exposure than peers.AlternativesFirst Trust Natural Gas ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, FCG is a reasonable option for those seeking exposure to the Energy ETFs area of the market. Investors might also want to consider some other ETF options in the space.Range Global LNG Ecosystem Index ETF (LNGZ) tracks RANGE GLOBAL LNG ECOSYSTEM INDEX. The fund has $2.76 million in assets. LNGZ has an expense ratio of 0.85%.Bottom LineTo learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.Want key ETF info delivered straight to your inbox?Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week.Get it free >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report First Trust Natural Gas ETF (FCG): ETF Research Reports Occidental Petroleum Corporation (OXY): Free Stock Analysis Report Western Midstream Partners, LP (WES): Free Stock Analysis Report Hess Midstream Partners LP (HESM): Free Stock Analysis Report Range Global LNG Ecosystem Index ETF (LNGZ): ETF Research ReportsTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks