Natural gas ETFs

Find out what a natural gas ETF is, the potential risks involved and how you can invest in one.

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Commonly asked questions See FAQs

Gas price volatility has been a feature of the post-pandemic recovery, as soaring demand has collided with supply interruptions. It has been a reminder of the various different forces that weigh on gas prices – from growing demand in Asia, to infrastructure problems across Europe, to the decarbonisation of the global economy. For investors keen to participate in this volatile and multi-faceted market, natural gas ETFs are an option.

What is natural gas?

Natural gas is a source of energy of power, for heating, fuel, and electricity generation. It also has a role in manufacturing. The price of natural gas rises and falls according to fluctuations in supply and demand. The four largest suppliers of natural gas are the US, Russia, Iran and Canada, while the largest consumers of natural gas are the US, China, Iran and Canada.

Best natural gas ETFs

Top three ETFs traded in the USA by YTD (year-to-date) performance based on ETF Database to 8 February 2024:

Fund nameTickerYTD performance (to 8 February 2024)Link to invest
ProShares UltraShort Bloomberg Natural GasKOLD23.88%
United States 12 Month Natural Gas Fund LP UNL-6.07%
United States Natural Gas Fund LP UNG-8.58%Invest now

If you’re looking for natural gas ETFs available on the London Stock Exchange, we’ve got you covered too:

Fund nameTickerYTD performance (to 8 February 2024)Link to invest
WisdomTree Natural GasNGSP-16.40%Invest now

All investing should be regarded as longer term. The value of your investments can go up and down, and you may get back less than you invest. Past performance is no guarantee of future results. If you’re not sure which investments are right for you, please seek out a financial adviser. Capital at risk.

How do natural gas ETFs work?

There aren’t many natural gas ETFs and most of them are listed in the US market. Most of the natural gas ETFs gain exposure to natural gas prices through futures contacts, rather than via stocks of natural gas companies. Many will track the Bloomberg Natural Gas Subindex, the main benchmark index for this area.

The natural gas ETFs will give exposure to range of futures contracts, diversifying across different maturities, with the aim of holding multiple options to help manage risk.

How to invest in natural gas ETFs

Natural gas ETFs trade on exchange like a normal share. As such, investors can buy them through a platform or broker.

It is worth considering that an investment in natural gas is very concentrated. Natural gas is subject to a range of market forces and everything from a pipeline problem to adverse weather conditions can influence the price. The recent volatility in prices has been created by both supply and demand problems and shows the complexities of understanding the market.

In selecting the best natural gas ETF, investors need to consider how closely it tracks natural gas prices and the cost of the ETF. Other options would be a diversified energy ETF or, more broadly, a commodities ETF.

Out top picks for where to buy ETFs

Best for cheap ETF investing

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Get a £10 - £50 referral bonus
  • Choose from 600+ ETFs
  • Investing tools and resources
  • Fractional investing

Best for mobile ETF trading

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Up to 4.9% interest on uninvested cash
  • 0% commission on ETFs
  • Demo account available
  • Excellent trading app

Best for 0% commission ETFs

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  • No commission on ETFs
  • Choose from 400+ ETFs
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Bottom line

The natural gas market is volatile and is subject to a broad range of different forces. The price can be influenced by supply problems, such as pipeline disruptions or political uncertainty, but also by demand considerations, as has been seen as the world has emerged from the pandemic. A natural gas ETF is one of the few ways to get pure exposure to the natural gas investment market. If you’re unsure which provider best suits your investment goals, you can compare the features from a range of platforms that let you buy ETFs in the UK.

Frequently asked questions

Compare investment platforms to buy ETFs

Table: sorted by promoted deals first
1 - 8 of 8
Name Product Finder score ETFs on offer Min. initial deposit Price per trade Platform fees Offer Link
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FREE TRADES
eToro Free Stocks
4.4
★★★★★
420
$100
£0 on stocks
£0

Capital at risk. Other fees apply.

Platform details
FREE TRADES
IG Share Dealing
4.1
★★★★★
5,400
£0
UK: £8
US: £10
EU: 0.1% (min €10)
£0
Get 0% commission on US shares when you make 3+ trades in the previous month.

Capital at risk

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Freetrade
4.4
★★★★★
200
£0
£0
£0

Capital at risk

Platform details
interactive investor Trading Account
4.2
★★★★★
1,000
£0
£3.99 (free regular investing)
£4.99-£19.99
Get £100 free trading credit when opening a Trading Account by 30 April. Capital at risk. T&Cs apply.

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Platform details
Saxo Share Dealing Account
4.3
★★★★★
£0
£3
0.12% per year

Capital at risk

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InvestEngine
4.3
★★★★★
610
£100
£0
0% - 0.25%
Get a Welcome Bonus of up to £50 when you invest at least £100 with InvestEngine. T&Cs apply.

Capital at risk

Platform details
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OFFER
CMC Invest share dealing account
4.4
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400
£0
£0
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Earn up to £1,000 when you transfer a minimum of £25,000 into your CMC account, plus get your first 3 months free when you upgrade to Plus plan. T&Cs apply. Capital at risk.

Capital at risk

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Hargreaves Lansdown Fund and Share Account
4.2
★★★★★
1,500
£1
£11.95
£0

Capital at risk

Platform details
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All investing should be regarded as longer term. The value of your investments can go up and down, and you may get back less than you invest. Past performance is no guarantee of future results. If you’re not sure which investments are right for you, please seek out a financial adviser. Capital at risk.

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