Natural gas commodity ETFs gain their exposure to natural gas prices through futures contracts. The natural gas futures market has been stuck in a state of contango. [Five Things to Know About Commodity ETFs]
“Effectively, the fund sells its soon-to-expire position and purchases a contract further from expiry to avoid physical delivery,” according to Morningstar analyst Abraham Bailin. “When the prices of those back-month contracts exceed the price of the front-month contract (known as a state of ‘contango’), the fund loses money each time it rolls its position.”
Natural gas ETFs include:
- First Trust ISE-Revere Natural Gas Index Fund (NYSEArca: FCG)
- Teucrium Natural Gas Fund (NYSEArca: NAGS)
- United States Natural Gas Fund (NYSEArca: UNG)
- United States 12 Month Natural Gas Fund (NYSEArca: UNL)
Natural gas ETNs:
- iPath Natural Gas Total Return ETN (NYSEArca: GAZ)
- ETRACS Natural Gas Futures Contango ETN (NYSEArca: GASZ)
- iPath Seasonal Natural Gas ETN (NYSEArca: DCNG)
- ETRACS Alerian Natural Gas MLP ETN (NYSEArca: MLPG)
Inverse and leveraged funds:
- ProShares Ultra DJ-UBS Natural Gas ETF (NYSEArca: BOIL)
- ProShares UltraShort DJ-UBS Natural Gas ETF (NYSEArca: KOLD
- Direxion Daily Natural Gas Related Bull 3x Shares ETF (NYSEArca: GASL)
- Direxion Daily Natural Gas Related Bear 3x ETF (NYSEArca: GASX)
iPath Natural Gas Total Return ETN
For more information on the natural gas market, visit our natural gas category.
Max Chen contributed to this article.