De-Fracking a Hard Asset: Natural-Gas Related ETPs

Posted on 08/13/2012

How bad has the slide in Natural Gas prices been? Well, on the one hand, Natural Gas Spot Prices (NG/) have outperformed American International Group (AIG) since the mid-point of 2008.  Then again, on the other hand AIG was down 94% and some of the Natural Gas-related ETFs underperformed AIG over the same period.  From June 30th, 2008 Natural Gas prices are down 76% (Continuous Commodity Index (UV/Y) was -5% over the same period), and are only a few months removed from their lowest levels in 13 years.

While a lot of people were elsewhere, there has been a great deal of "product" come out of the exchange-traded industry.  While we are not saying that Natural Gas is an established leader, it is deserving of the great deal of interest it has attracted in recent weeks from our client base.  Demand appears to be returning, and is doing so with prices of most Gas-related securities still very depressed relative to where they were a few years hence.  In addition to the interest from our clients, so too has come a great deal of questions regarding all of the different investment options available.  Which invest in Natural Gas prices and which invest in Natural Price companies? Which generate a k-1, and which don't?  We thought it timely to go through the motions of aggregating all of the Natural Gas-related product now available, as a reference tool if nothing else.  The two tables below show exchange-traded products that are commodity-based, for both single beta and inverse/leveraged products.

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Symbol Performance
RING 25.368%
GDX 24.483%
GDXJ 22.942%
PSAU 21.313%
USV 18.860%
GLDX 18.732%
SIL 16.955%
SLVP 16.210%
DBS 16.181%
GEUR 16.035%
SIVR 15.366%
Sector Symbol Performance
Basic Materials RING 25.368%
Financial REZ 10.558%
Healthcare XBI 9.766%
Consumer Noncyclical IPS 5.620%
Technology AAIT 5.524%
Energy ICLN 5.098%
Utilities AMPS 4.933%
Telecommunications IST 4.467%
Consumer Cyclical IPD 2.798%
Industrial IGF 2.017%

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