What are the different types of natural gas funds?
There are two main types of natural gas funds, although each type can be divided into subcategories. The first main category of natural gas funds consists of mutual funds that invest in natural gas shares. The second main category of natural gas funds consists of funds traded on the stock exchange (ETF). ETF is a basket of supplies that behaves similarly to an individual supply. It can be purchased and sold on the market whenever its host exchange is open. Mutual funds are investment means with an exposure to a diverse group of shares. Mutual funds that are natural gas funds usually consist of a natural gas inventory. They may also include issues of financial contracts that follow the futures price of natural gas. Natural gas index funds do not attempt to overcome the stock market. They are only worrying about monitoring the natural gas sector on the market. Some natural gas funds invest in futures on natural gas. Others invest directly on the natural gas market and seek to make money fromthe prices of natural gas. Managers of some natural gas funds aggressively seek to defeat the market by investing in various companies that explore natural gas or provide sectors related services.
The primary advantage of mutual funds is that they provide exposure to a diverse group of shares. The disadvantage is that they cannot be traded in real time as individual shares can. It may also be difficult to find out exactly which shares are in the fund, as Fund companies often publish this information only at the end of a quarter.
ETF, the second main type of natural gas funds, is like index funds in that they are passively managed and monitored by a particular sector of industry. The advantage of the ETF is their flexibility. Like individual shares, they can be traded in real time and are experiencing changes in prices during the day. Many natural gas funds are available in the form of ETF, including funds that investIt eats in drills, funds that invest in suppliers, and funds that shortcuts - or bet against - natural gas market.