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Unseasonably warm weather across the U.S. has kept natural gas futures-based exchange traded funds firmly depressed. ETF investors, though, may opt to gain exposure to the natural gas equities side as a less risky play on the natural gas market.

With oversupply concerns still weighing on the futures market, funds such as the U.S. Natural Gas Fund (NYSEARCA:UNG) and iPath Natural Gas Total Return ETN (NYSEARCA:GAZ) may be better suited as a gauge of the markets, writes Don Dion for TheStreet. [Warm Weather Saps Natural Gas ETFs]

However, an ETF linked to natural gas-related equities may be a better investment idea as producers continue to expand within the energy sector. [ET For instance, Chevron (NYSE: CVX recently revealed that it will go forward with its own shale natural gas production, expanding into the Marcellus Shale formation, despite the low gas prices, according to a Wall Street Journal article.

The First Trust ISE-Revere Natural Gas Index Fund (NYSEARCA:FCG) provides investors with the opportunity to gain broad exposure to producers engaged in the production of natural gas. For example, top holdings include Stone Energy (NYSE:SGY) (4.2%), Cimarex Energy (NYSE:XEC) (4.1%) and EOG Resources (NYSE:EOG) (3.8%).

FCG has gained 1.5% year-to-date. In comparison, UNG dropped 30.7% year-to-date as natural gas prices have fallen to $2.2.

First Trust ISE-Revere Natural Gas Index Fund

click to enlarge


Max Chen contributed to this article.

Source: A Stock ETF Approach to Natural Gas

Additional disclosure: Tom's clients own UNG.