Oil prices zoomed higher again today after President Trump said that the Iran war is set to continue for at least two to three more weeks. His comment that Iran could be bombed back to the stone ages was interpreted by analysts as meaning that energy and power infrastructure in Iran could be in his sights.
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“Around a fifth of global LNG supplies are usually transported through the Strait of Hormuz, but it remains largely impassable, and it’s becoming clear that there is going to be no easy exit from this war, with a lack of planning increasingly evident,” said Susannah Streeter, chief investment strategist at Wealth Club.
Brent Crude was up nearly 8% at $111.73.
Let’s look at two ETFs from our Best Oil and Gas ETF list likely to keep benefiting from oil price volatility.
First Trust Natural Gas ETF (FCG)
It is a dynamic investment vehicle designed to capture the growth potential within the energy sector, specifically focusing on the lucrative niche of Oil, Gas & Consumable Fuels. This ETF presents an opportunity for investors to gain targeted exposure to the natural gas industry, a critical component of the global energy market known for its cleaner-burning characteristics compared to other fossil fuels.
It has $866.04 million in Assets under Management and is up 36% in the year-to-date.
ProShares UltraShort Oil & Gas (DUG)
This is a strategically designed exchange-traded fund (ETF) that offers investors a unique opportunity to capitalize on the inverse performance of the oil and gas sector. Categorized under the energy sector, this ETF specifically targets the oil, gas, and consumable fuels niche, providing a powerful tool for those looking to hedge against or profit from declines in this volatile industry. By employing a leveraged strategy, DUG seeks to deliver twice the inverse daily performance of the Dow Jones U.S. Oil & Gas Index, making it an ideal choice for sophisticated investors aiming to navigate market downturns or enhance their portfolio’s exposure to energy sector dynamics.
With its focus on shorting the oil and gas market, this ETF not only serves as a potential hedge against rising energy costs but also offers the possibility of significant returns during periods of negative sentiment or declining prices in the oil and gas markets.
It has $13.88 million of Assets under Management but because of the oil price hike is down around 48% this year. But it is still one worth watching in case the Iran war takes a sudden different course sending prices lower.
You can access a whole range of ETFs via the TipRanks Compare ETFs page.