Barclay’s has filed with the SEC to launch a new exchange traded fund (ETF) tied to the price of natural gas. Like other commodity index funds, the fund is tied to the account of a rolling futures account , with one NG contract replacing the next from one month to another. The fund charges 89 basis points but will be offset by interest income of more than 5% and will list on the New York Stock Exchange reports Matt Hougan for Seeking Alpha.

Natural gas accounts for a quarter of U.S. energy consumption, and with the presence of both oil and natural gas ETFs, interesting cross trades will be created. The iShares Goldman Sachs Commodity Natural Gas Indexed Trust will not be for the faint of heart due to the volatility of natural gas prices, as they are known to jump around, as much as 10% in a day.

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.

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