First Trust Natural Gas ETF (NYSEARCA:FCG) and United States Natural Gas Fund (NYSE:UNG) both pitch themselves as ways to play natural gas, yet they have produced wildly different outcomes for investors who held them.
The First Trust Natural Gas ETF (NYSEARCA:FCG) and the United States Natural Gas Fund (NYSE:UNG) both let investors express a view on natural gas through fundamentally different mechanics.
Looking for broad exposure to the Energy - Natural Gas segment of the equity market? You should consider the First Trust Natural Gas ETF (FCG), a passively managed exchange traded fund launched on May 8, 2007.
| XMEX Exchange | US Country |
The fund is an investment vehicle primarily focusing on the energy sector, particularly the midstream activities and the exploration and production of natural gas. By investing a minimum of 90% of its net assets in common stocks, depositary receipts, MLP units, and other securities included in its targeted index, the fund seeks to mirror the performance of mid and large capitalization companies involved in these sectors. The specific index that the fund tracks is meticulously designed to represent the financial achievements of companies substantially involved in midstream operations or natural gas exploration and production, making it a targeted choice for investors interested in this particular segment of the market.
Investments in common stocks of companies that are engaged in midstream energy activities or the exploration and production of natural gas. This offers investors an opportunity to partake in the equity growth of these companies.
Holding depositary receipts enables the fund to invest in foreign companies that are active in the midstream and natural gas sectors, thus broadening investment horizons and diversification.
Investing in Master Limited Partnership (MLP) units offers exposure to the infrastructure and logistics aspect of the energy sector, including pipelines and storage facilities, with a potential for steady income through distributions.
Includes additional securities such as bonds or derivatives that are tied to the performance of companies within the midstream and natural gas sectors, providing the fund with flexibility to adjust its investment strategy as per market conditions.