Natural gas ETFs

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

See the top performing ETFs Best ETFs
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 international trading
Saxo Share Dealing Account logo
Go to site
Capital at risk. T&Cs apply.
Free professional investing tools
Over 6,000 ETFs & funds
Access 50 global markets
Commissions from $1
Best for mobile ETF trading
XTB ETFs logo
Finder Award
Go to site
Capital at risk. T&Cs apply.
Earn up to 5.2% interest on uninvested cash.
Commission-free trading
Over 5,400 stocks & ETFs
Invest in fractional shares
Best for customer satisfaction
Hargreaves Lansdown Fund and Share Account logo
Finder Award
Go to site
Capital at risk. T&Cs apply.
97% would recommend
Free fund trading
Expert insights
Wide range of accounts

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

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.

More guides on Finder

  • Commodity ETFs

    Is investing in commodity ETFs a wise decision, and how can you select the best-performing funds?

  • Emerging markets ETFs

    Find out all the basics covering how to invest in emerging market ETFs along with some of the best-performing emerging market ETFs available to UK investors.

  • Accumulating vs distributing ETFs

    Find out how accumulating and distributing ETFs work, plus the pros and cons of each.

  • Invesco ETFs

    We reveal the best performing Invesco ETFs and explain how to invest in them.

  • iShares ETFs

    Want to know more about the best iShares ETFs to buy as a UK investor? We’ll explain what your options are and whether the iShares ETFs are typically a good pick.

  • Vanguard ETFs

    Find out the best Vanguard ETFs to buy as a UK investor, including how the funds have performed and where you can invest.

  • Ethical ETFs

    Ethical ETFs has been hugely successful in recent years. Find out more about ethical ETFs and whether they’re worth investing in.

  • Dividend ETFs

    Dividend ETFs are funds that are traded on stock exchanges that are heavily focused on companies that pay dividends.

  • Technology ETFs

    Technology has been a hugely successful investment in recent years. Find out more about technology ETFs and why it’s worth investing in them.

  • Gold ETFs

    Find out about gold ETFs, what influences their prices, how you can trade them and whether they could be worth your weight in gold.

Go to site