“To address the problem, other futures-following gas ETFs use slightly different strategies. Both U.S. 12 Month Natural Gas (NYSEArca: UNL) and Teucrium Natural Gas (NYSEArca: NAGS) go beyond near-term contracts to try to overcome contango, and their losses over the past year are indeed less severe,” Caplinger said.
Also, iPath Dow Jones-UBS Natural Gas ETN (NYSEArca: GAZ) is an exchange traded note issued by Barclays designed to follow natural gas futures.
However, GAZ is trading at a premium to indicative value of more than 50%, setting investors up for potential losses unrelated to the movement of natural gas prices.
Barclays, the issuer for GAZ, suspended new share issuance in 2009. [Natural Gas ETN Premium Tops 100%]
Finally, there are ETFs that avoid the futures market altogether by investing in natural gas producer stocks. Funds in this category include First Trust ISE-Revere Natural Gas Index Fund (NYSEArca: FCG).
From a technical perspective, some analysts see a bullish inverted “head and shoulders” pattern in natural gas prices.
Natural Gas
