Natural Gas Inverse ETF Funds
There are a few options for investors wanting to add an inverse Natural Gas ETF into their investment portfolio. Natural Gas has recently seen a surge in supply thanks to improved technology and a decrease in demand due to warmer weather. Add these two effects and you get an underperforming sector.
Technology for natural gas exploration evolved and permitted the gas trapped in shale rock to be extracted. Shale gas produces more gas production leading to an oversupply in the market.
If you believe natural gas will continue to decline in value then you may be interested in an inverse natural gas ETF. When the price of natural gas declines then your investment goes up in value.
The HBP NYMEX Natural Gas Inverse ETF (HBP) seeks daily investment results that correspond to one times (100%) the inverse (opposite) of the daily performance of the NYMEX natural gas futures contract for the next delivery month.
If you’re interested in making 3x the inverse of natural gas then you may be interested in Direxion Daily Natural Gas Related Bear 3X Inverse ETF (GASX). This ETF’s performance is based on the inverse (opposite) of the price of natural gas and will perform 3x or 300% in the opposite direction. This leveraged inverse ETF is meant for experienced traders, since performance can drastically change.
Another option investors have if they are interested in profiting when natural gas declines in value is by shorting a Natural Gas ETF. Below is a list of Natural Gas ETFs that can be shorted:
ETFS Natural Gas (NGAS)
First Trust ISE-Revere Natural Gas Index Fund (FCG)
iPath Dow Jones-UBS Natural Gas Subindex Total Return ETN (GAZ)
United States Natural Gas Fund (UNG)
United States 12 Month Natural Gas Fund (UNL)
The largest Natural Gas ETF is UNG, which has a marketcap of $2.2 Billion.
The supply for natural gas continues to increase with no real demand from consumers due to warmer weather. If this continues then natural gas prices will continue to decline leading the any investor that has purchased an inverse natural gas ETF to profit.