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Launched on 05/08/2007, the First Trust Natural Gas ETF (FCG) is a passively managed exchange traded fund designed to provide a broad exposure to the Energy - Natural Gas segment of the equity market.
RSPG, IEO, FCG, PXE and XOP are included in this Analyst Blog.
The energy sector has become a leader after being a laggard over the past two years.
The First Trust Natural Gas ETF (FCG) was launched on 05/08/2007, and is a smart beta exchange traded fund designed to offer broad exposure to the Energy ETFs category of the market.
Natural gas prices have rallied in 2024, leading to increased production and potential oversupply. The opening of the Matterhorn Express Pipeline may further decrease Henry Hub prices, impacting natural gas producers. FCG ETF, which includes natural gas producers, MLP companies, and oil enterprises, is now a 'Hold' due to changing market dynamics.
First Trust Natural Gas ETF warrants a buy rating due to strong demand sources for natural gas, increasing EV infrastructure, and lack of alternative sources to power the grid. Electric vehicles require an expanding electric "grid" in the U.S. and upwards of 80% of this U.S. electric grid growth is powered by natural gas. FCG has demonstrated strong long-term performance, a favorable valuation currently, and has low volatility compared to other natural gas ETFs.
The First Trust Natural Gas ETF holds a portfolio of Oil & Gas equities, reflecting both the profits made from selling and transporting natural gas. The companies in the FCG portfolio have improved their balance sheets post-Covid, reducing debt and increasing liquidity. Natural gas prices have dropped significantly in 2023, with the UNG futures ETF down over -66%.
The First Trust Natural Gas ETF aims to provide investment results that correspond to the price and yield of the ISE-Revere Natural Gas Index. The fund's performance has been stagnant since 2022, potentially indicating lower prices ahead. The fund offers diversification and inexpensive valuations, making it a compelling long-term investment opportunity in the energy sector.
The First Trust Natural Gas ETF (FCG) was launched on 05/08/2007, and is a passively managed exchange traded fund designed to offer broad exposure to the Energy - Natural Gas segment of the equity market.
The First Trust Natural Gas ETF (FCG) was launched on 05/08/2007, and is a smart beta exchange traded fund designed to offer broad exposure to the Energy ETFs category of the market.