When it comes to clean energy, renewables are typically in focus. However, as we are still transitioning from a hydrocarbon world to one where solar and wind power will be dominant, it’s important to consider the options in traditional fuels. Natural gas is a relatively clean fuel that produces fewer emissions than petroleum products or coal. Used for domestic energy and large-scale energy production, natural gas is an ideal short-term investment for alternative investors.
The United States Natural Gas Fund (NYSE Arca: UNG) could return value to a bargain portfolio.
This fund invests primarily in natural gas futures but also has petroleum and oil assets. It is relatively affordable and has a low net expense ratio. While not ideal for a long-term holding due to the volatility of natural gas, the potential upside on the fund is significant. The energy market is recovering from the global pandemic. America’s GDP increased by more than 30% sequentially in the previous quarter. As the economy gets back to previous levels, prices for natural gas and oil are likely to increase. This fund has traded in a range of $8.58 – $18.20 over the last 52-weeks. Buying on the dip is a viable strategy.
The range shows the potential of this pick to grow as the economy strengthens. Bargain energy stocks have become rarer in 2020. This option, considering its current price, is one to consider in December.
- Net Expense Ratio: 33%
- 52-Week Peak: $18.20
- 52-Week Return: -48.37%
All information is based on current and historical market data, as well as publicly available financial data. As with any financial decision, your own research is important. Stock market outcomes can never be 100% accurately predicted. Familiarity with historical data, individual industries, and individual stocks is key to developing a robust portfolio. Note that stock prices can fluctuate rapidly during trading sessions.