It is no secret that Natural Gas prices have fallen sharply over the past several years (with Gas prices looking like they will dip below $2 lately), and recently selling pressure has accelerated in related equity names as measured by First Trust ISE Revere Natural Gas (NYSEArca: FCG), which has declined nearly 10% just in the past month, and is trading at its lowest level since last October.
Recently we highlighted Natural Gas futures related “Bull” and “Bear” products, which presents the opportunity today to delve into Gas related equity funds as well. [ETF Chart of the Day: Natural Gas]
To put the natural gas sell-off context, FCG was as high as $19.41 a share in mid-March but has fallen sharply to below $17 as of today.
Top holdings in FCG are SGY (4.14%), XEC (3.99%), MUR (3.95%), SD (3.82%), and TLM (3.74%).
Two ETFs that have attracted growing institutional interest in the past few years are Direxion Daily Natural Gas Related Bull 3X (NYSEArca: GASL) and Direxion Daily Natural Gas Related Bear 3X (NYSEArca: GASX), and both ETFs track the ISE Revere Natural Gas index (the same index that FCG tracks), but from a daily leveraged “bull” and “bear” standpoint.
Designed as trading and hedging vehicles, we expect that with price movement and specifically selling pressure accelerating in the Natural Gas equity space in recent sessions, that these products will also see a pick-up in volumes in sympathy as speculators and hedgers become more active in the sector.
First Trust ISE Revere Natural Gas