NEW YORK (TheStreet) -- After kicking off the year on an encouraging note, natural gas prices have returned to their losing ways. With oversupply still a problem, the futures-tracking United States Natural Gas Fund (UNG) has once again retreated to all-time lows.Meanwhile, although it has remained buoyed around 2012 highs, the iPath Dow Jones UBS Natural Gas Subindex Total Return ETN ( GAZ) ( GAZ) is in no shape to be played with, either. Throughout the past month, explosive demand for this product has caused it to break away from its underlying index, resulting in a staggering premium. This premium has caused the fund to swing wildly in both directions, sending investors on a rollercoaster ride.
As its name implies, FCG is dedicated to tracking a basket of companies dedicated to or heavily involved in the production of natural gas. The fund, however, is also well-positioned to benefit from the industry's changing landscape. As a growing number of integrated oil titans have begun to expand their reach into this corner of the energy sector, the fund has evolved, adding names like Exxon Mobil, ConocoPhillips ( COP) and Royal Dutch Shell to its roster. In fact, ConocoPhillips can be found listed among the fund's 10 largest positions, accounting for nearly 4% of its assets. Year to date, FCG's strength has shown through. As UNG has tumbled nearly 30%, the equity-tracking option has managed to hold up well. It appears to have snapped its late-2011 losing streak and is up nearly 3% since the start of the year. The 10 Worst of the Worst in 2012 As rising energy prices steal headlines and threaten market confidence, alternatives like natural gas will likely gather fans. ETFs allow investors to target this fuel from a variety of perspectives. Despite these choices, however, producers remain the best bet here. -- Written by Don Dion in Williamstown, Mass.