“The new trend can be found in natural gas and natural gas stocks. Natural gas is quickly emerging as a pocket of strength in the markets. For months, it has been underperforming the broader markets as supply far outstripped demand. But now natural gas is gaining new attention as a much safer, cleaner, more plentiful and cheaper alternative to crude oil,” Don Dion Reports From The Street.
Dion goes on to say, “Natural gas futures hit their highest level in more than 15 weeks on Monday as speculation rose that the chances for a very active hurricane season are high. Plus, there is even more speculation that soon policy makers in Washington are going to start listening to natural gas bulls, such as T. Boone Pickens, who argue that natural gas is the best long-term solution — economically and environmentally — for solving America’s energy problems. Natural gas futures cooled off on Tuesday, dropping 2.2% following a cooler weather forecast for the U.S. Midwest and Northeast. An explosion in a natural gas pipeline in Texas also pressured prices lower. But if the trend really is strong, these two issues won’t be able to keep prices down for long.”
“The U.S. Natural Gas Fund (NYSE:UNG) recently broken above its 50-day moving average, and it has broken through some previous resistance at around $7.70 a share that held a strangle hold on this ETF for almost three months. The (NYSE:UNG) is a pure play on the price of natural gas futures. This technical move is significant and could be marking a new trend higher that is still in the early stages of development. Even President Obama recently pulled an about-face and endorsed natural gas as a viable alternative to crude oil during a speech last Wednesday at Carnegie Mellon in Pittsburgh,” Dion 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.