5 Best Gas ETFs to Buy in Q4 2024

Natural gas is the fastest growing fossil fuel and already provides a quarter of our total energy consumption. This guide picks out the best gas ETFs to invest in this year.
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Updated on Jul 8, 2024
Reading time 9 minutes

You can easily invest in the success of the gas market using an ETF, or exchange-traded fund. ETFs are beginner-friendly funds that trade on the stock market and that you can buy and sell shares in whenever you like.

There are two types of natural gas ETF; the majority track the gas price itself, while a few own stocks in companies whose business is in natural gas. Our experts have combed through both sets of options to come up with the best natural gas ETFs available today.

What are the top gas ETFs to buy?

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Our expert picks for the best gas ETFs for this year are available in the table below. Use their individual ticker symbols to find them through your broker, or scroll down to learn more about why each one was chosen.

#ETF symbolETF nameLearn more
1UNGUnited States Natural Gas FundLearn more >
2BOILProShares Ultra Bloomberg Natural Gas ETFLearn more >
3IEOiShares Oil & Gas Exploration & Production UCITS ETFLearn more >
4XOPSPDR S&P Oil & Gas Exploration & Production ETFLearn more >
5KOLDFirProShares UltraShort Bloomberg Natural Gas ETFLearn more >
List selected by our team of analysts, updated November 2024

1. United States Natural Gas Fund (UNG)

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  • Assets: $711 million
  • Expense ratio: 1.01%
  • Year of inception: 2007
  • Average annual return since inception: -30%
  • Dividend Yield: N/A
  • Benchmark index: N/A

The UNG fund is an ETF that tracks the price of natural gas. If you think the price of natural gas is going to increase, then this is the easiest way to speculate on it without creating your own commodity trading account.

The value of UNG shares is based on the gas price, which is set according to the value of the next futures contract in natural gas to expire. Futures contracts are how the actual gas itself is bought and sold, so it represents a close approximation as to the value of the gas at any given time.

The UNG ETF did well in 2022 after Russia’s invasion of Ukraine pushed gas prices sharply higher. However, the next few years, including in 2024, have been difficult as the price of natural gas collapsed. The main challenge for the fund is that it has a big expense ratio of 1.01%, which is much higher than most funds.

2. ProShares Ultra Bloomberg Natural Gas (BOIL) 

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  • Assets: $506 million
  • Expense ratio: 2.11%
  • Year of inception: 2011
  • Average annual return since inception: -57%
  • Dividend Yield: N/A
  • Benchmark index: Bloomberg Natural Gas Subindex

The Ultra Bloomberg Natural Gas Fund (BOIL) is another natural gas fund that is a bit different from the UNH in that it is highly leveraged.

The fund aims to generate returns that correspond to the daily return of the Bloomberg Natural Gas Subindex. It generates strong returns when the price of natural gas is rising and vice versa.

This fund is great when the price of natural gas is doing well and then drops sharply when the price is not doing well. As such, while the UNG ETF has dropped by 30% in the past 12 months, BOIL has fallen by over 68% in the same period. 

It is also a highly expensive fund since it charges a whopping 2.11% expense ratio while most funds charge less than 0.20%.

3. iShares Oil & Gas Exploration & Production (IEG)

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  • Assets: $744 million
  • Expense ratio: 0.40%
  • Year of inception: 2006
  • Average annual return since inception: 5.8%
  • Dividend Yield: 2.25
  • Benchmark index: Dow Jones U.S. Select Oil Exploration & Production Index

The iShares exploration fund is a different type of ETF to the previous two. Instead of tracking the natural gas price, it owns stocks in a variety of companies who drill for oil and gas and then turn it into usable fuel.

That means it might not suit every investor, because it includes stocks in oil companies as well as gas. If you want to invest in natural gas for environmental reasons, or because you think it is a cleaner alternative to the oil industry, it might not be for you.

However, a fund like this is a lot less risky than one that simply tracks the price of gas. Some of its holdings are large gas exploration companies, such as ConocoPhillips, which makes up 10% of the entire fund on its own. Its other constituent companies are the likes of EOG Resources, Phillips 66, Devon, and Valero Energy.

4. SPDR S&P Oil & Gas Exploration & Production ETF (XOP)

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  • Assets: $3.5 billion
  • Expense ratio: 0.35%
  • Year of inception: 2006
  • Average annual return since inception: 5.8%
  • Dividend Yield: 2.35
  • Benchmark index: S&P® Oil & Gas Exploration & Production Select Industry

Like the previous fund, this one tracks the performance of companies involved in fossil fuel exploration projects. All the companies in this fund are listed on the S&P Total Market Index, a broad list of businesses from across the oil and gas sector. The fund owns each of them equally, so rather than being heavily invested in a small collection of stocks, it gives investors more of an overall exposure to the entire industry.

Like many funds with exposure to the gas industry in particular, the SPDR ETF has performed very well since 2020 as energy prices have rebounded. Crude oil has remained above $80 in the past few years. This price action has helped to offset the falling natural gas prices.

This is a good fund to invest in if you want to get an exposure to the US energy sector. It is also relatively cheaper than other funds we have covered in this fund.

5. ProShares UltraShort Bloomberg Natural Gas ETF (KOLD)

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  • Assets: $154 million
  • Expense ratio: 1.66%
  • Year of inception: 2011
  • Average annual return since inception: -9%
  • Dividend Yield: N/A
  • Benchmark index: Bloomberg Natural Gas Subindex

The UltraShort Bloomberg Natural Gas Fund (KOLD) is another popular fund to consider, especially when you expect the price of natural gas to drop. 

It is the opposite of the BOIL fund in that its returns correspond to minus 2x the daily performance of the benchmark index.  By being short the price of natural gas, the fund has beaten most ETFs in the past few years. 

There are two risks for investing in this fund. First, it has a high expense ratio of 1.66%, and second, it underperforms the market when the price is rising. 

Where to buy the best gas ETFs

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You can buy ETFs through an online broker. It’s virtually the same process as getting an individual stock; you need to create an account, look for the ETF’s unique ticker symbol, and decide how many shares you want to own. All of the brokers below are great options to get started with.

We found 4 online brokers for users based in

Plus500 review
4.5
Plus500
Min. Deposit $100
Fees From 2%
No. assets 2800+
Demo account Yes

Plus500 review

Buy or sell stock CFDs with Plus500. 82% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.

eToro review
4.6
eToro
Min. Deposit $100
Fees 1%
No. assets 50+
Demo account Yes

eToro review

eToro offers real assets only, no CFD products. eToro securities trading offered by eToro USA Securities, Inc. (‘the BD”), member of FINRA and SIPC. Investing involves risk, and content is provided for educational purposes only, does not imply a recommendation, and is not a guarantee of future performance. Invezz.com is not an affiliate and may be compensated if you access certain products or services offered by the BD.

Public.com review
4.4
Public
Min. Deposit $20
Fees 1-2%
No. assets 9000+
Demo account No

Public.com review

Cryptocurrency execution and custody services are provided by Apex Crypto LLC (NMLS ID 1828849) through a software licensing agreement between Apex Crypto LLC and Public Crypto LLC. Crypto trading on Public platforms is served by Public Crypto LLC and offered through APEX Crypto. Please ensure that you fully understand the risks involved before trading.

What is a gas ETF?

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It can be a fund that tracks the price of natural gas, or one that owns shares in companies that operate in the natural gas sector. Those can be companies that get the gas out of the ground, ones that build the pipelines to transport it around, or the businesses at the end who sell it to consumers.

What makes an ETF different from traditional funds is that it’s always available to trade on the stock market. Whereas mutual (managed) funds can only be bought and sold at a fixed price one per day, ETFs are just like any other stock with a constantly fluctuating price, based on the value of the assets it holds.

ETFs are also, normally, passive investment funds. That means there isn’t a manager deciding on which assets to own. Instead, it simply tracks a benchmark index (such as the price of natural gas) or owns all the stocks from a particular index, which might be something like the S&P 500.

Are gas ETFs a good investment?

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ETFs generally are a good investment for beginners, or anyone who doesn’t have the time to micromanage their own portfolio. You can easily ‘set and forget’ an ETF, trusting the diversity of assets that it owns to protect you from too much risk. The most important decision is choosing a good industry, and whether gas is the one is up to you.

Over the last 20 years, natural gas has become more and more popular as a cleaner alternative to other fossil fuels, like coal and oil. It now makes up a quarter of the overall energy demand, it’s easy to store, and creates fewer emissions than traditional fuel sources when it’s burned.

However, the growth in demand stalled during the pandemic. It’s still costly and time consuming to transport gas around, and it’s under pressure from even more environmentally-friendly renewable energy sources. You have to decide whether it still represents a good investment despite that.

Methodology: How we choose the best gas ETFs

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At Invezz, we are dedicated to helping investors make informed decisions by providing authoritative, accessible, and engaging advice and recommendations. Our curated section of the best Exchange-Traded Funds (ETFs) is carefully selected by our team of experienced market analysts and reviewed by a sub-editor. This methodology outlines the rigorous process we follow to ensure our ETF recommendations are up-to-date, reliable, and insightful.

  • Analyst research & recommendations: Our seasoned market analysts use their in-depth sector knowledge to identify ETFs with strong potential, ensuring they meet high standards of performance, liquidity, and market potential.
  • ETF evaluation: We evaluate ETFs based on their underlying assets, historical performance, expense ratios, and tracking accuracy, alongside macroeconomic factors and sector trends.
  • Fund performance reports: We assess ETFs through the latest performance reports, analyzing key metrics like returns, volatility, expense ratios, and assets under management (AUM).
  • Sector analysis and external recommendations: Our detailed sector analysis, combined with recommendations from reputable sources like Barron’s and Zacks, provides an additional layer of validation for our selections.
  • Quarterly review & refresh: We update our curated ETF list quarterly, re-evaluating each ETF based on the latest reports, industry developments, and market conditions to ensure our recommendations reflect the most current information available.

Crispus Nyaga

Crispus Nyaga

Market Analyst

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Crispus is a Financial Analyst for Invezz covering the stock, cryptocurrency and forex markets. He’s an experienced analyst with more than 8 years of industry experience. His analysis is featured on industry leaders including macrostreet.com,  SeekingAlpha, Forbes, InvestingCube, Investing.com, and MoneyTransfers.com, to name a few....