First Trust ISE-Revere Natural Gas Index
Tracking 25 energy companies that derive a substantial portion of their revenue from the production of natural gas, the First Trust ISE-Revere Natural Gas Index (FCG) could be the top equity play on the theme.
Roughly 90% of the firms included in the equal-weight index are located in the U.S., with the remainder being Canadian. This includes exposure to heavy-weights like Chesapeake Energy (CHK) as well as smaller fries like Magnum Hunter Resources (MHR).
So far, that varied exposure to small-caps, mid-caps and large-caps hasn’t really helped investors. Since the fund’s inception back in 2007, returns have been a mixed bag. FCG has actually managed to produce a 1.74% loss versus a 4.99% gain for the S&P 1500 Energy Index. However, that result actually isn’t too bad considering it launched just before the recession, not to mention last year’s historic drop in natural gas prices.
The fact that FCG is still now trading below its IPO price could signal a major value for investors — especially considering the bullish tailwinds propelling natural gas higher. Expenses for the fund run 0.60% — or $60 per $10,000 invested.