Natural Gas ETF

Loading the player...

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.

BREAKING DOWN '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.

RELATED TERMS
  1. Oil Price to Natural Gas Ratio

    A mathematical ratio comparing the prices of crude oil and natural ...
  2. Natural Gas Equivalent

    The amount of energy used by the burning of natural gas versus ...
  3. EIA Natural Gas Report

    A weekly report provided every Thursday by the Energy Information ...
  4. United States Natural Gas Fund ...

    An exchange-traded security designed to track percentage changes ...
  5. Liquefied Natural Gas

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

    A natural gas industry term typically used to measure the amount ...
Related Articles
  1. Mutual Funds & ETFs

    Top 3 Natural Gas ETFs (UNG, FCG)

    Explore the variety of options that are available through exchange-traded funds for investors looking to obtain exposure to the natural gas market.
  2. Savings

    Do Natural Gas Prices Always Follow Oil Trends?

    Prices for oil and natural gas are highly correlated. But investors should be aware of different factors affecting the prices of these commodities.
  3. Mutual Funds & ETFs

    Will the Natural Gas ETF KOLD Stay Hot?

    Proshares UltraShort Bloomberg Natural Gas ETF isn't an investment for the faint of heart.
  4. Mutual Funds & ETFs

    The 4 Largest Natural Gas ETFs (UNG, UGAZ)

    Discover the four largest natural gas exchange-traded funds as ranked according to assets under management, and their major characteristics.
  5. Mutual Funds & ETFs

    Top 3 Leveraged Natural Gas ETFs/ETNs (UGAZ, DGAZ)

    Find out about the top leveraged ETFs that track natural gas, such as the VelocityShares 3X Long Natural Gas and ProShares Ultra Bloomberg Natural Gas.
  6. Options & Futures

    The Smartest Strategies For Trading Natural Gas Options

    There are multiple strategies for trading natural gas options, once you have the right data. Here we discuss the basics.
  7. Options & Futures

    Do Oil and Natural Gas Prices Rise And Fall Together?

    Do the prices of crude oil and natural gas affect each other? Investopedia explores price patterns and provides analysis.
  8. Mutual Funds & ETFs

    ETF Analysis: U.S 12 Month Natural Gas (UNL)

    Learn about the United States 12 Month Natural Gas Fund, an exchange-traded fund that invests in 12-month futures contracts for natural gas.
  9. Mutual Funds & ETFs

    UNG: United States Natural Gas Fund LP ETF

    Find out more about the United States Natural Gas exchange-traded fund, the characteristics of the ETF and the suitability and recommendations of it.
  10. Stock Analysis

    The World's Top 10 Natural Gas Companies (XOM, OGZPY)

    Read about the 10 companies that combined to produce about 105 billion cubic feet of natural gas in 2014, about 30% of the world's total production.
RELATED FAQS
  1. What economic indicators are important to consider when investing in the oil and ...

    Find out more about economic indicators and which ones are important when investing in companies in the oil and gas sector. Read Answer >>
  2. How does the risk of investing in the oil and gas sector compare to the broader market?

    Learn how the oil and gas sector has risk both with the broader market and the price of oil and gas, and understand how correlation ... Read Answer >>
  3. Are there leveraged ETFs that track the oil & gas drilling sector?

    Explore the investing options that are available through leveraged ETFs that can be used to track the oil and gas drilling ... Read Answer >>
  4. What percentage of the global economy is comprised of the oil & gas drilling sector?

    Read about a rising industry that already composes as much as one-twentieth of total global economic output: the oil & gas ... Read Answer >>
  5. What companies are positioned to grow from the popularity of ETFs? (VHT, DSUM)

    Discover reasons for the growing popularity of exchange-traded funds (ETFs) and some of the types of companies benefiting ... Read Answer >>
  6. How does fracking affect natural gas prices?

    Take a deeper look at the impact of hydraulic fracturing on the price for natural gas, and why fracking may eventually price ... Read Answer >>
Hot Definitions
  1. Reverse Mortgage

    A type of mortgage in which a homeowner can borrow money against the value of his or her home. No repayment of the mortgage ...
  2. Labor Market

    The labor market refers to the supply and demand for labor, in which employees provide the supply and employers the demand. ...
  3. Demand Curve

    The demand curve is a graphical representation of the relationship between the price of a good or service and the quantity ...
  4. Goldilocks Economy

    An economy that is not so hot that it causes inflation, and not so cold that it causes a recession. This term is used to ...
  5. White Squire

    Very similar to a "white knight", but instead of purchasing a majority interest, the squire purchases a lesser interest in ...
  6. MACD Technical Indicator

    Moving Average Convergence Divergence (or MACD) is a trend-following momentum indicator that shows the relationship between ...
Trading Center