To FCG’s credit, the ETF defied Monday’s slump in natural gas futures, gaining 1.6% due in part to news that Chesapeake Energy (NYSE: CHK) is pursuing alternatives, possibly a spin-off, of its oil services business. Chesapeake, the second-largest U.S. natural gas producer, is 3.42% of FCG’s weight. No stock accounts for more than 5% of the fund’s weight.
Worth noting is FCG’s legacy of out-performance of UNG even when the latter declines. In the six-year period ending 2008, UNG only topped FCG once, in 2008. There are, however, other elements to consider with FCG.
“At the end of the day FCG invests in equities and with the pressure we have seen on stocks this year the ETF is not immune to the risk off dynamics we have seen in the overall market,” said Al Sabogal, former head trader for Perry Capital, in an email exchange with ETF Trends earlier this year. “Investors may be skeptical about the duration and sustainability of high demand for the underlying commodity…the polar vortex made for a harsh winter but spring is just around the corner.” [An ETF Left Behind]
First Trust ISE-Revere Natural Gas Index Fund
