Global X launches natural gas ETF to capture US export growth

US-based asset manager Global X has unveiled a new index fund focused on the natural gas value chain, capitalising on the growing momentum of liquified natural gas exports.

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Asset manager Global X Management Company LLC has launched a new exchange-traded fund (ETF) named the Global X U.S. Natural Gas ETF, listed under the ticker LNGX. This financial product offers targeted exposure to the full U.S. natural gas value chain, from exploration to export. The fund is passively managed with an expense ratio of 0.45%.

Positioning across the entire value chain

The LNGX ETF tracks the Global X U.S. Natural Gas Index. It includes companies operating in upstream exploration and production, midstream transport, storage, processing, liquefaction, and export. Global X states that the fund aims to meet market demand for pure-play exposure to the natural gas sector, viewed as a distinct segment within the broader US oil and gas industry.

With the United States leading global liquified natural gas (LNG) exports, the fund seeks to benefit from an expanding market. The country accounts for around one-quarter of global gas production and a similar share of global electricity generation, according to Global X internal estimates.

Flows driven by international trade dynamics

The fund’s strategy is based on shifting trade flows and energy policies that are reinforcing the role of US natural gas as a supply source for international markets. Global X executives believe that policy developments could lead to increased global reliance on US LNG exports in the coming years.

In addition, rising electricity consumption, particularly from data centres, supports natural gas demand to meet baseload power needs, alongside other sources such as renewables.

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