The commodity futures markets have been affected and in turn, may be affecting the broader commodity market. A look at two exchange traded funds (ETFs) that track the same commodity may give more insight.
Although there are two ETFs that track natural gas, they are going in two directions. The important difference in performance between these two funds can be credited to structure and the ongoing drama unfolding in the futures markets, as well as the regulations that could be coming down on these markets any day now, explains Don Dion for TheStreet. (What it means for investors).
The two funds in question are:
- United States Natural gas (NYSEArca: UNG): down 49.8% year-to-date; UNG recently updated some changes to its strategy, which you can read about here.
- First Trust ISE-Revere Natural Gas (NYSEArca: FCG): up 59.3% year-to-date; FCG tracks the performance of companies involved in the natural gas industry
As a result of forthcoming Commodity Futures Trading Commission (CFTC) regulations, exchange traded products may continue to see restructurings, closings and share redemptions. (Read all about what’s happened up to this point here).
For more stories about commodity ETFs, visit our commodity ETF category.
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.