Natural Gas ETF Landscape

natural gas etfNatural Gas ETFs are a good way to invest in the world’s ever growing demand for energy. Several flavors of natural gas ETFs are on the market to match almost every variation of risk appetite.

The United States Natural Gas ETF (Amex: UNG) was launched as a new way for investors and hedgers to manage their exposure to energy. UNG tracks in percentage terms the movements of natural gas prices.

See the UNG website for more information.

ETF Securities sponsors a Natural Gas ETF (LSE: NGAS.L) that is tied to an index of natural gas futures. The sub-index is an “excess return” index and the interest component combines to give a total return investment.

The security NGAS.L is a secured note that can be created or redeemed on demand (by market-makers). It trades on the Exchange just like an equity and its pricing and tracking operate similar to an Exchange Traded Fund.

See the ETFS website for more information.

First Trust
Advisors offers the ISE-Revere Natural Gas ETF (NYSEArca: FCG) which tracks an index of 30 companies that derive a substantial portion of their revenues from the exploration and production of natural gas. Top holdings as of 2/14/08 include Delta Petroleum (Nasdaq: DPTR), Cabot Oil & Gas (NYSE: COG) and Petroleum Development Corporation (Nasdaq: PETD).

See the First Trust website for more information.

State Street offers a couple of more traditional ways to invest in a Natural Gas ETF. The SPDR® S&P® Oil & Gas Equipment & Services ETF (Amex: XES) tracks an index of oil and gas equipment and services companies.

Top holdings as of 2/14/08 included:

  • Schlumberger Ltd. (NYSE: SLE)
  • Transocean Inc New (NYSE: RIG)
  • Halliburton Co (NYSE: HAL)
  • National Oilwell Varco Inc (NYSE: NOV)
  • Weatherford International (NYSE: WFT)

The SPDR® S&P® Oil & Gas Exploration & Production ETF (Amex: XOP) tracks and index of oil and gas exploration and production companies.

Top holdings as of 2/14/08 included:

  • Exxon Mobil (NYSE: XOM)
  • Chevron (NYSE: CVX)
  • Conocophillips (NYSE: COP)
  • Occidental (NYSE: OXY)
  • Devon Energy (NYSE: DVN)

Learn more at State Street’s website.

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