While all of these ETFs provide exposure to the natural gas market, each one operates differently, whether through futures contracts, energy stocks, or leveraged strategies. Some are designed for long-term investment, while others are better suited for short-term speculation.
Before investing, make sure to read into the details . Each fund has its own quirks that could surprise unsuspecting investors.
1. United States Natural Gas Fund
The United States Natural Gas Fund (UNG +1.69%) aims to reflect the daily price movement of natural gas as delivered at Henry Hub, Louisiana, a key pricing point for U.S. natural gas. However, this ETF does not hold physical natural gas. Instead, it gains exposure through futures contracts, specifically the nearest-month contract traded on the New York Mercantile Exchange (NYMEX).