“Last week the number of shares outstanding in the natural gas ETF (NYSE:UNG) dropped by 3.3%. This decline is interesting given that it occurred as the front two contracts on the Nymex Henry Hub curve slipped back into backwardation. The decline in shares is peculiar given that it now makes sense to own the (NYSE:UNG) in order to capture the positive roll. Be that as it may, despite this enticement, we do not expect to see retail investors rush back into the market anytime soon,” Stephen Schork Reports From CNBC.

Schork goes on to say, “Per the fund’s website, $10,000 invested back at the inception of the fund in February 2008 would only be worth about $1,500 as of the end of last month. Needless to say, despite the assurance of the natural gas permabulls, we can’t blame the little guy for being skeptical regarding the nearby prospects for natural gas riches. For example, if instead of buying at the inception of the fund you had bought at the bottom of the natural gas market (Sep-2009) then your $10,000 “investment” would be worth around $8,500 today… despite an 83% (!) increase in the price of natural gas. Thus, without the influx of cash into the front of the curve, chances are good the backwardation will be short-lived. Case in point, we are now one month past the summer solstice; this is historically the hottest part of the summer. Storage builds are currently at the slowest pace in five seasons, yet we have just now slipped into backwardation.”

“This is similar to the situation last winter when we were at the coldest part of the winter (i.e., the month following the winter solstice). It took one of the coldest Decembers in recent memory to finally push the front of the curve into backwardation. Yet, that backwardation did not even last through the end of February… despite some of the coldest and snowiest January’s and February’s ever recorded. Therefore, what is to prevent a similar situation occurring this time… outside of a hurricane in the Gulf that is? After all, just as we saw in March, weather-related demand will fade. Thus, without the industrials or the commercials to pick up the slack, analysts at The Schork Report are projecting that a hurricane is about all the bulls have to hope for,” Schork Reports.

ETFs offer an easy way to play Natural Gas and there are many options available besides the most popular US Natural Gas ETF (NYSE:UNG).  We have listed some other options for investors to look at and compare to one another below.  Note that we have listed some industry related ETFs as well as direct Natural Gas exposure plays excluding any leveraged ETFs.  You can also visit our U.S. Natural Gas ETF (NYSE:UNG) category for more insight. 

United States Natural Gas Fund (NYSE:UNG)            

The United States Natural Gas Fund, LP (NYSE:UNG) is a new way for investors and hedgers to manage their exposure to energy. The United States Natural Gas Fund LP (NYSE: UNG) is an exchange traded security that is designed to track in percentage terms the movements of natural gas prices. UNG issues units that may be purchased and sold on the NYSE Arca. The investment objective of UNG is for the changes in percentage terms of the units’ net asset value to reflect the changes in percentage terms of the price of natural gas delivered at the Henry Hub, Louisiana, as measured by the changes in the price of the futures contract on natural gas traded on the New York Mercantile Exchange that is the near month contract to expire, except when the near month contract is within two weeks of expiration, in which case it will be measured by the futures contract that is the next month contract to expire, less UNG’s expenses.  

United States 12 Month Natural Gas (NYSE:UNL)            

The investment seeks to reflect the changes, net of expenses, of the spot price of natural gas delivered at the Henry Hub, Louisiana, as measured by the changes in the average of the prices of 12 futures contracts on natural gas traded on the NYMEX. The fund will consist of the near month contact to expire and the contracts for the following eleven months, for a total of 12 consecutive months contracts, except when the near month contract is within two weeks of expiration, in which case it will be measured by the futures contract that is the next month contract to expire and the contracts for the following eleven consecutive months.            

iPath DJ-UBS Natural Gas TR Sub-Idx ETN (NYSE:GAZ)            

The investment seeks results that correspond generally to the price and yield performance, before fees and expenses, of the Dow Jones-UBS Natural Gas Total Return Sub-Index. The note is designed to reflect the performance of natural gas. The index is composed of the Henry Hub Natural Gas futures contract traded on the New York Mercantile Exchange.            

First Trust ISE-Revere Natural Gas Idx (NYSE:FCG)            

The investment seeks to replicate, net of expenses, the ISE-REVERE Natural Gas index. The fund invests at least 90% of assets in common stocks that comprise the index. The index is an equal-weighted index that consists of exchange-listed companies that derive a substantial portion of their revenue from the exploration and production of natural gas. The fund is nondiversified.            

iShares Dow Jones US Oil Equipment Index (NYSE:IEZ)            

The investment seeks results that correspond generally to the price and yield performance of the Dow Jones U.S. Select Oil Equipment & Services index. The fund generally invests at least 90% of assets in securities of the Underlying index and depositary receipts representing securities of the Underlying index. It may invest the remainder of assets in securities not included in the Underlying index but which BGFA believes will help the fund track Underlying index, and in futures contracts, options on futures contracts, options and swaps as well as cash and cash equivalents, including shares of money market funds advised by BGFA. It is nondiversified.            

Jefferies | TR/J CRB Wildcatters Exploration & Production Equity ETF (NYSE:WCAT)            

The investment seeks investment results that replicate as closely as possible, before fees and expenses, the price and yield performance of the Thomson Reuters/Jefferies CRB Wildcatters Energy E&P Equity index. The fund normally invests at least 80% of total assets in the equity securities that comprise the underlying index and depositary receipts based on the securities in index. The index is designed to track the overall performance of a universe of listed U.S. and Canadian small and mid-capitalization companies engaged in the exploration and production of oil and natural gas. The fund is nondiversified.

NYSE:FCG, NYSE:GAZ, UNG, UNL