The investment seeks investment results that correspond generally to the price and yield (before the fund's fees and expenses) of the Nasdaq U... Show more
The First Trust Nasdaq Oil & Gas ETF, trading under the ticker FTXN, is an exchange-traded fund (ETF) that offers investors a single, tradeable vehicle for gaining exposure to U.S. oil and gas companies. Rather than buying shares of individual energy producers and refiners, investors can use FTXN to access a diversified basket of the sector in one transaction. The fund is part of First Trust's lineup of index-based, rules-driven ETFs and is designed to track a benchmark that applies a "smart" factor-based approach to an otherwise familiar energy universe.
FTXN's investment objective is to seek results that correspond generally to the price and yield, before fees and expenses, of the Nasdaq US Smart Oil & Gas Index. This is a passively managed fund, meaning it does not rely on a portfolio manager selecting stocks based on subjective judgment; instead, it follows a transparent, rules-based index methodology. The fund will normally invest at least 90% of its net assets in the securities that make up the index.
The underlying index is a modified factor-weighted benchmark created and administered by Nasdaq. It begins with oil and gas securities drawn from the Nasdaq US Benchmark Index and ranks them on factors including gross income, return on assets, momentum, and cash flow. Eligible securities are then weighted based on their cash flow, subject to a maximum single-stock weight of 8% and a minimum of 0.50%. This methodology is intended to tilt the portfolio toward companies with stronger financial characteristics rather than simply weighting by market capitalization.
The ETF is issued by First Trust Advisors L.P., a Wheaton, Illinois-based investment firm that sponsors a large family of ETFs. FTXN was launched on September 20, 2016, and is structured as an open-ended fund listed on the Nasdaq exchange. As of mid-2026, the fund reported roughly $160 million in total net assets and approximately 44 holdings, making it a relatively small, focused product within the energy-ETF category.
FTXN's portfolio is essentially 100% allocated to the energy sector, with near-total exposure to U.S. companies. Its largest holdings have typically included major integrated oil companies and large independent producers such as ConocoPhillips, Chevron, and ExxonMobil, alongside names like EOG Resources, Marathon Petroleum, Occidental Petroleum, Valero Energy, and Diamondback Energy. Because the top ten positions can represent more than half of the fund's assets, individual stock weightings have a meaningful influence on overall performance.
The ETF charges a net expense ratio of 0.60%, which covers its management and operating costs. It rebalances and reconstitutes its index on a semi-annual basis. FTXN is classified as a non-diversified fund, a designation that permits greater concentration in fewer securities than diversified funds, which can magnify both gains and losses.
FTXN attracts attention from investors seeking targeted energy exposure without having to research and select individual oil and gas stocks. The fund offers a convenient way to express a view on the sector, whether driven by expectations for oil and natural gas prices, global supply and demand dynamics, or the financial health of U.S. energy producers.
The "smart" factor methodology also distinguishes FTXN from simpler market-capitalization-weighted energy funds. By weighting holdings on cash flow and incorporating value, momentum, and profitability signals, the index aims to emphasize companies with stronger financial profiles. For investors who believe a rules-based, factor-tilted approach may offer advantages over plain market-cap weighting, FTXN provides a readily available implementation. Its holdings also span multiple segments of the energy value chain, from upstream exploration and production to downstream refining, offering broad sector exposure in a single fund.
Investing in FTXN carries several risks. First, it is a concentrated sector fund: virtually all of its assets sit in energy, so it can be far more volatile than a broadly diversified equity fund and can move sharply in response to changes in oil and natural gas prices, geopolitical events, and regulatory shifts. Second, as a non-diversified fund with a heavy top-ten weight, its performance can be disproportionately influenced by a handful of large holdings.
The fund is also subject to market risk and the specific financial and operational risks of the oil and gas industry, including commodity price cyclicality, capital-intensive operations, and environmental and climate-related regulation. Its 0.60% expense ratio is higher than some low-cost energy ETFs, which can reduce net returns over time. Finally, like all index ETFs, FTXN may experience a small tracking difference between its own returns and those of its underlying benchmark, and its shares trade at market prices that can deviate slightly from net asset value (NAV).
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The First Trust Nasdaq Oil & Gas ETF provides a focused, rules-based way to gain exposure to U.S. oil and gas companies, with a factor-tilted weighting methodology that emphasizes cash flow and other financial characteristics. Its concentrated energy allocation and moderate expense ratio make it a specialized tool best understood as part of a broader, diversified portfolio rather than a standalone holding. For investors comfortable with commodity-linked volatility and sector concentration, FTXN offers a transparent and convenient means of accessing the energy industry.
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Category Energy