Why would I purchase a Natural Gas ETF when I can buy a natural gas index mutual fund?

You certainly can buy a gas mutual fund from a fund family. But the annual management fees of doing so will be more expensive than the management fees of an ETF. Plus if you trade a natural gas index fund, you will only be able to buy and sell at the closing price at the end of the day. What if some news come out that you think will cause natural gas prices to rally? If you buy an index fund, most of the move will be made that day while you’re sitting on the side waiting to buy at the end of the day. Better to be able to react immediately and buy instead of watching other people make money.

Can Natural Gas ETF beat the market?

Natural Gas ETF provide an easy way for an investor to trade various segments of natural gas. There are gas ETFs that mirror the natural gas futures market and there are Natural Gas ETFs that attempt to follow the prices of various gas exploration companies for example. Those ETFs take a basket of stocks to give you diversified holdings in natural gas.

How and where do I buy them?

You can buy or sell them as you would any stock at your brokerage firm. Don’t have an account to trade stock? You can visit Sharebuilder and buy ETFs for $4 to open an account with as little as $0. Thats right, there is NO minimum amount to open an account. Visit the site for more  details.

ETF’s are they insured?

ETF’s are tightly regulated by the Securities and Exchange Commission (also known as the S.E.C.) The S.E.C. examines each ETF that is created and brought to market. The Depository Trust Clearing Corporation is in charge of the clearing of trades. Their job is to ensure that the stock certificates involved in each trade settle in the proper stock account each night.

As in any stock, there are underlying risks involved. That is up to you the trader if the risk profile matches yours. You are ultimately responsible for your trading decisions.

Why not just buy individual Natural Gas Stocks?

You can, but most investors prefer to be diversified when they invest. Depending on the size of your investment portfolio, you will not get the diversification that you need. You may be only to purchase a few stocks but with a Natural Gas ETF you can buy several for the same amount of investment. Plus if you traded say the United States Natural Gas Fund, you get to trade NYMEX natural gas futures without opening a futures account or exposing yourself to that much more risk. You could buy a few shares instead of having to put up the margin to trade the natural gas futures.

Are there ETFs for Propane?

Despite the demand and usage of propane gas, there are currently no propane gas ETFs at the present time.

Possibly Related Posts:

• Natural Gas Futures, How They Effect Natural Gas ETFs
• Natural Gas ETF Short Funds
• Natural Gas ETFs and the CFTC New Rules
• Wildcatters Exploration & Production Equity ETF Review
• Why you should trade the Natural Gas ETF over futures and index funds.