Top Natural Gas ETFs of 2023: Prices, Performance & Insights
Explore the leading natural gas ETFs in the U.S. market for 2023, including detailed analysis of United States 12 Month Natural Gas Fund LP and United States Natural Gas Fund LP, their performance, fees, and investment strategies.
Discover broad exposure to natural gas through the United States 12 Month Natural Gas Fund LP and the United States Natural Gas Fund LP.
Essential Highlights
- Natural gas futures have sharply declined in 2023 due to abundant stockpiles, mild weather, and reduced demand.
- The United States 12 Month Natural Gas Fund LP (UNL) and United States Natural Gas Fund LP (UNG) are the only U.S.-based natural gas ETFs, excluding leveraged and inverse options.
- These ETFs invest in natural gas futures contracts, providing investors with direct exposure to natural gas price movements.
In 2023, natural gas prices have faced significant downward pressure driven by large inventories and weak consumption, leading to the steepest price drops recorded by federal inflation metrics in March. This decline has persisted throughout the year.
The Bloomberg Natural Gas Subindex has plummeted approximately 70% over the last year, a stark contrast to the S&P 500 Index's 22% gain as of June 20.
Among U.S. natural gas ETFs, UNL and UNG stand out as the primary options for investors seeking commodity exposure without leveraging or inverse strategies.
Below is an in-depth look at the 2023 performance and key metrics of these two ETFs, with data current as of June 16.
Best 1-Year Return and Lowest Fees: United States 12 Month Natural Gas Fund LP (UNL)
- One-Year Performance: -51.3%
- Expense Ratio: 0.90%
- Dividend Yield: Not Applicable
- Average Daily Volume (3 Months): 19,366 shares
- Assets Under Management: $16.3 million
- Launch Date: November 18, 2009
- Issuer: USCF Investments
UNL holds a diversified portfolio of natural gas futures contracts spanning the near month plus the following 11 months on the NYMEX, equally weighted, along with swap and forward contracts. This structure reduces volatility compared to other natural gas ETFs.
UNL is well-suited for investors seeking natural gas price exposure without the complexities and risks associated with direct futures trading.
Most Liquid Natural Gas ETF: United States Natural Gas Fund LP (UNG)
- One-Year Performance: -71.6%
- Expense Ratio: 1.06%
- Dividend Yield: Not Applicable
- Average Daily Volume (3 Months): 22,057,920 shares
- Assets Under Management: $1.11 billion
- Launch Date: April 18, 2007
- Issuer: USCF Investments
UNG operates as a commodity pool, pooling investor capital to trade natural gas futures contracts. It tracks the daily percentage changes in natural gas prices based on Henry Hub delivery in Louisiana.
UNG focuses on front-month futures contracts, making it more sensitive to contango effects and better suited for short-term traders or those seeking an inflation hedge.
Disclaimer: The information provided is for educational purposes only and does not constitute investment advice. Please consult a financial advisor before making investment decisions.
As of the article's publication, the author holds no positions in the ETFs discussed.
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