Designed to provide broad exposure to the Energy ETFs category of the market, the First Trust Natural Gas ETF (FCG Quick QuoteFCG - Free Report) is a smart beta exchange traded fund launched on 05/08/2007.

What Are Smart Beta ETFs?

Products that are based on market cap weighted indexes, which are strategies designed to reflect a specific market segment or the market as a whole, have traditionally dominated the ETF industry.

Because market cap weighted indexes provide a low-cost, convenient, and transparent way of replicating market returns, they work well for investors who believe in market efficiency.

If you're the kind of investor who would rather try and beat the market through good stock selection, then smart beta funds are your best choice; this fund class is known for tracking non-cap weighted strategies.

By attempting to pick stocks that have a better chance of risk-return performance, non-cap weighted indexes are based on certain fundamental characteristics, or a combination of such.

This area offers many different investment choices, such as simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies; however, not all of these strategies can deliver superior results.

Fund Sponsor & Index

The fund is managed by First Trust Advisors. FCG has been able to amass assets over $334.65 million, making it one of the larger ETFs in the Energy ETFs. Before fees and expenses, FCG seeks to match the performance of the ISE-REVERE Natural Gas Index.

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.

Cost & Other Expenses

For ETF investors, expense ratios are an important factor when considering a fund's return; in the long-term, cheaper funds actually have the ability to outperform their more expensive cousins if all other things remain the same.

Annual operating expenses for this ETF are 0.57%, making it on par with most peer products in the space.

The fund has a 12-month trailing dividend yield of 2.80%.

Sector Exposure and Top Holdings

ETFs offer 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.

FCG's heaviest allocation is in the Energy sector, which is about 97.3% of the portfolio.

Looking at individual holdings, Hess Midstream Lp (class A) (HESM) accounts for about 4.85% of total assets, followed by Conocophillips (COP) and Occidental Petroleum Corporation (OXY).

FCG's top 10 holdings account for about 43.37% of its total assets under management.

Performance and Risk

Year-to-date, the First Trust Natural Gas ETF has lost about -2.75% so far, and it's up approximately 0.67% over the last 12 months (as of 09/19/2025). FCG has traded between $19.37 $27.09 in this past 52-week period.

The ETF has a beta of 0.95 and standard deviation of 29.04% for the trailing three-year period, making it a high risk choice in the space. With about 40 holdings, it has more concentrated exposure than peers .

Alternatives

First Trust Natural Gas ETF is not a suitable option for investors seeking to outperform the Energy ETFs segment of the market. Instead, there are other ETFs in the space which investors should consider.

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Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Energy ETFs

Bottom Line

To 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.