Sabogal also notes that FCG has a low correlation to natural gas futures. The ETF holds 28 stocks, many of which looked to boost oil production in recent years as gas prices remained depressed.
No holding accounts for more than 4.48% of FCG’s weight. Top-10 holdings include Penn Virginia (NYSE: PVA), Magnum Hunter Resources (NYSE: MHR) and Cabot Oil & Gas (NYSE: COG). Interestingly, FCG does not own shares of Exxon Mobil (NYSE: XOM), the largest U.S. natural gas producer, though that might be a plus considering Exxon’s 10.2% year-to-date slide. [Energy ETFs Look to Rebound in February]
Despite its laggard status to start 2014, all is not lost for FCG.
“When (and if) investors return back to a risk on environment they will most likely be looking for stocks and sectors that have shown alpha during the market selloff (outperforming the overall market in a down tape) as well as stocks with a positive fundamental backdrop that should provide the necessary ingredients for market beating performance. While the individual stocks in this sector have shown to be volatile, investors looking to get exposure to the sector can benefit from the diversity of a well-constructed ETF,” said Sabogal.
First Trust ISE-Revere Natural Gas Index Fund
