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

The First Trust Natural Gas ETF (FCG) was launched on 05/08/2007, and is a passively managed exchange traded fund designed to offer broad exposure to the Energy - Natural Gas segment of the equity market.While an excellent vehicle for long term investors, passively managed ETFs are a popular choice among institutional and retail investors due to their low costs, transparency, flexibility, and tax efficiency.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 16, placing it in bottom 0%.Index DetailsThe fund is sponsored by First Trust Advisors. It has amassed assets over $334.37 million, making it one of the average sized 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.CostsExpense ratios are an important factor in the return of an ETF and in the long term, cheaper funds can significantly outperform their more expensive counterparts, other things remaining the same.Annual operating expenses for this ETF are 0.57%, making it on par with most peer products in the space.It has a 12-month trailing dividend yield of 2.87%.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 97.20% of the portfolio.Looking at individual holdings, Eog Resources, Inc. (EOG) accounts for about 4.74% of total assets, followed by Conocophillips (COP) and Occidental Petroleum Corporation (OXY).The top 10 holdings account for about 42.35% of total assets under management.Performance and RiskThe ETF has lost about -4.82% and is down about -11.20% so far this year and in the past one year (as of 07/23/2025), respectively. FCG has traded between $19.37 and $27.09 during this last 52-week period.The ETF has a beta of 0.89 and standard deviation of 30.11% for the trailing three-year period, making it a high risk choice in the space. With about 41 holdings, it has more concentrated exposure than peers.AlternativesFirst Trust Natural Gas ETF sports a Zacks ETF Rank of 5 (Strong Sell), which is based on expected asset class return, expense ratio, and momentum, among other factors. FCG, then, is not a suitable option for investors seeking exposure to the Energy ETFs segment of the market. However, there are better ETFs in the space to consider.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 ConocoPhillips (COP): Free Stock Analysis Report Occidental Petroleum Corporation (OXY): Free Stock Analysis Report EOG Resources, Inc. (EOG): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks