Natural Gas ETF

AAA

DEFINITION of 'Natural Gas ETF'

Exchange-traded funds (ETFs) that invest in natural gas futures and other products in an effort to closely track the price of delivered natural gas at market. Natural gas ETFs are set up as commodity pools, which issue limited partnership interests as opposed to shares. The fund may also invest in heating oil, crude oil and gasoline futures.

INVESTOPEDIA EXPLAINS 'Natural Gas ETF'

Natural gas ETFs (and those of other natural resources/commodities) opened well when they first began trading on the American Stock Exchange (AMEX). Having a more liquid way to access natural gas as both a speculative and hedging play is very useful to both retail and institutional investors. Investors should expect small tracking errors over shorter time frames, but see strong correlation to the spot price of natural gas over medium and longer time horizons.

VIDEO

RELATED TERMS
  1. EIA Natural Gas Report

    A weekly report provided every Thursday by the Energy Information ...
  2. Liquefied Natural Gas

    The liquefied state of natural gas, which is created by cooling ...
  3. Billions Of Cubic Feet Equivalent ...

    A natural gas industry term typically used to measure the amount ...
  4. Futures

    A financial contract obligating the buyer to purchase an asset ...
  5. Spot Market

    1. A commodities or securities market in which goods are sold ...
  6. Dow Jones AIG Commodity Index - ...

    A rolling commodities index composed of futures contracts on ...
Related Articles
  1. Uncovering Oil And Gas Futures
    Active Trading

    Uncovering Oil And Gas Futures

  2. Using ETFs For Small Periodic Investments
    Mutual Funds & ETFs

    Using ETFs For Small Periodic Investments

  3. Accounting For Differences In Oil And ...
    Fundamental Analysis

    Accounting For Differences In Oil And ...

  4. Commodities That Move The Markets
    Options & Futures

    Commodities That Move The Markets

Hot Definitions
  1. Leading Indicator

    A measurable economic factor that changes before the economy starts to follow a particular pattern or trend. Leading indicators ...
  2. Wage-Price Spiral

    A macroeconomic theory to explain the cause-and-effect relationship between rising wages and rising prices, or inflation. ...
  3. Accelerated Depreciation

    Any method of depreciation used for accounting or income tax purposes that allows greater deductions in the earlier years ...
  4. Call Risk

    The risk, faced by a holder of a callable bond, that a bond issuer will take advantage of the callable bond feature and redeem ...
  5. Parity Price

    When the price of an asset is directly linked to another price. Examples of parity price are: 1. Convertibles - the price ...
  6. Earnings Multiplier

    An adjustment made to a company's P/E ratio that takes into account current interest rates. The earnings multiplier is used ...
Trading Center