Exchange Traded Funds that Provide Exposure to Energy Commodities
Exchange Traded Funds (ETFs) are now in a position to offer easy access to commodities. With ETFs, you can now access investment products that were once the purview of expert industry insiders and professional commodity traders.
United States Oil
If you’re looking for exposure to the oil markets without going through futures contracts, the United States Oil Fund (NYSE: USO) is an alternative. USO seeks to track the price changes of the front-month contract of light, sweet crude WTI contract traded on the NYMEX section of the Chicago Mercantile Exchange (CME). Check the prospectus for fees associated with rolling the contracts and operating the ETF.
United States Natural Gas
Like its crude oil counterpart, the United States Natural Gas ETF (NYSE: UNG) aims to give investors the ability to track the performance of natural gas, one of the bulwarks in the energy complex. The ETF mirrors the performance of the natural gas futures contract in the NYMEX section of the CME.
Natural gas can be a fairly volatile commodity, partly because it’s highly responsive to changes in weather patterns, which are fairly unpredictable. Make sure that you carefully tread into the natural gas markets.
Market Vectors Global Alternative Energy
If you want to get involved in the alternative energy space, check out the Market Vectors Global Alternative Energy ETF (NYSE: GEX). This product offers direct exposure to the leading names in the renewable energy space, including solar companies, wind companies, biomass players, and more. This ETF invests across market caps and in different markets, giving you a positive geographic and market size mix.