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. Active Trading

    Uncovering Oil And Gas Futures

    Find out how to stay on top of data reports that could cause volatility in oil and gas markets.
  2. Mutual Funds & ETFs

    Using ETFs For Small Periodic Investments

    ETFs have lower costs than index funds, but the cost to buy and sell can be more expensive.
  3. Fundamental Analysis

    Accounting For Differences In Oil And Gas Accounting

    How a company accounts for its expenses affects how its net income and cash flow numbers are reported.
  4. Options & Futures

    Commodities That Move The Markets

    Find out how the everyday items you use can affect your investments.
  5. Insurance

    Futures Fundamentals

    For those who are new to futures but want a solid understanding of them, this tutorial explains what futures contracts are, how they work and why investors use them.
  6. Mutual Funds & ETFs

    Exchange-Traded Funds (ETFs)

    This vehicle combines the diversification of a mutual fund with the flexibility of a stock. Learn more about them here.
  7. Active Trading

    Timing Trades With The Commodity Channel Index

    We introduce how to use this oscillator, which identifies cyclical trends, for determining buy and sell points.
  8. Chart Advisor

    Profit From Holiday Spending With This ETF

    As Americans finish purchasing the last of their holiday gifts, the consumer discretionary sector will continue to be one of the primary beneficiaries.
  9. Investing in emerging market bonds might sound creative and fun, but sometimes it’s more profitable in keeping it simple and close to home.
    Mutual Funds & ETFs

    The EMB Emerging Market Bond ETF: Use Caution

    Investing in emerging market bonds might sound creative and fun, but sometimes it’s more profitable in keeping it simple and close to home.
  10. Get Rich Slowly found about the insights on investing from about 2,000 selected individuals by an online survey. Do they have an investing strategy?
    Investing Basics

    Do You Have An Investing Strategy?

    Get Rich Slowly found about the insights on investing from about 2,000 selected individuals by an online survey. Do they have an investing strategy?

You May Also Like

Hot Definitions
  1. Santa Claus Rally

    A surge in the price of stocks that often occurs in the week between Christmas and New Year's Day. There are numerous explanations ...
  2. Commodity

    1. A basic good used in commerce that is interchangeable with other commodities of the same type. Commodities are most often ...
  3. Deferred Revenue

    Advance payments or unearned revenue, recorded on the recipient's balance sheet as a liability, until the services have been ...
  4. Multinational Corporation - MNC

    A corporation that has its facilities and other assets in at least one country other than its home country. Such companies ...
  5. SWOT Analysis

    A tool that identifies the strengths, weaknesses, opportunities and threats of an organization. Specifically, SWOT is a basic, ...
  6. Simple Interest

    A quick method of calculating the interest charge on a loan. Simple interest is determined by multiplying the interest rate ...
Trading Center