Back to top

ETF News And Commentary

As many investors know, natural gas ETFs like (UNG - ETF report) have been terrible performers over the long haul. These funds aren’t inherently bad though, they are just troubled by a big slope on the futures curve.

This situation has led many natural gas ETFs to go down significantly, as these funds must continually buy up newer contracts at elevated prices and then resell them closer to expiration at deflated levels. Basically, with an unfavorable futures curve, these ETFs are usually ‘buying high and selling low’.

While this has been a huge problem, it hasn’t really been the case in 2013 as a number of factors have conspired to push natural gas higher. Chief among them are a long winter, less supply, and fewer prospects for more production in the near-term (see The Comprehensive Guide to Natural Gas ETFs).

These items have helped UNG to surge on the year, pushing the fund up double digits in the time period. If that wasn’t enough though, leveraged funds have also been winners in the space with (BOIL - ETF report) adding 30% and (UGAZ - ETF report) soaring by over 50% in the time frame.

Just be careful with these products going forward, as even if the supply situation continues in natural gas’ favor, the space could be hurt if the futures curve changes. So while natural gas ETFs may have more room to run, it is by no means a sure thing, suggesting that traders should take extra caution when looking at this ever-popular corner of the investing world (read Natural gas ETFs: Futures vs. Equities).

For more information on natural gas ETFs so far in 2013, watch our short video on the subject below:

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>

Please login to Zacks.com or register to post a comment.

If you wish to go to ZacksFunds.com, click OK. If you do not, click Cancel.

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
FELCOR LODG… FCH 10.47 +3.46%
OLD DOMINIO… ODFL 63.48 +1.18%
VASCO DATA… VDSI 13.57 +0.67%
AMEDISYS IN… AMED 20.18 +0.10%
LENOVO GROU… LNVGY 27.07 +0.04%