United States Natural Gas Fund (UNG) in 2025: A Guide for Australian Investors

The global energy landscape has been anything but predictable in recent years, and 2025 is shaping up to be another year of transformation. For Australians looking to diversify their portfolios, international energy ETFs like the United States Natural Gas Fund (UNG) are increasingly on the radar. But what exactly is UNG, how has it performed, and does it deserve a spot in your investment mix this year?

What Is the United States Natural Gas Fund (UNG)?

UNG is a US-listed exchange-traded fund designed to track the daily price movements of natural gas delivered at Henry Hub, Louisiana—the benchmark for US natural gas pricing. Rather than holding physical gas, UNG invests in near-month natural gas futures contracts traded on the New York Mercantile Exchange (NYMEX). This gives investors direct exposure to US natural gas price swings, without the logistical headaches of commodity storage or delivery.

Key facts about UNG in 2025:

• Managed by USCF Investments, with over USD 1.5 billion in assets under management as of April 2025
• Tracks front-month NYMEX natural gas futures contracts
• Trades in US dollars on the NYSE Arca exchange
• Highly liquid, but subject to rolling costs and contango effects

2025 Natural Gas Market Trends: What’s Moving UNG?

The past two years have been a rollercoaster for global energy. After the 2022-2023 price spikes driven by geopolitical shocks and post-pandemic demand, 2024 saw a pullback as global supply chains stabilised. However, in 2025, natural gas remains a focal point for several reasons:

• US LNG Exports: The US is the world’s largest LNG exporter, and recent policy shifts—including the Biden administration’s 2024 pause on new LNG export terminal approvals—have injected fresh volatility into the market.
• Weather Volatility: North America’s winter 2024-25 is expected to be colder than average, putting upward pressure on demand and prices.
• Global Decarbonisation: As coal-fired plants shut down, natural gas remains a key “transition fuel” in the US and Europe, boosting its long-term demand prospects—even as renewables gain ground.

UNG’s price is highly sensitive to these macro factors. In Q1 2025, the fund’s value has swung between USD 17 and USD 25 per share, reflecting the tug-of-war between bearish oversupply concerns and bullish export demand.

Risks, Rewards, and How Australians Can Access UNG

Investing in UNG is not for the faint-hearted. Here’s what Australian investors should weigh before jumping in:

• Volatility: UNG’s returns can be extreme—double-digit monthly moves are common. This can mean big gains, but also sharp losses.
• Contango and Roll Costs: Because UNG rolls its futures contracts each month, it can lose value in “contango” markets (when future prices are higher than spot prices). This drag can erode returns even if the spot price of gas rises modestly.
• Currency Risk: UNG trades in USD, so movements in the AUD/USD exchange rate can impact your results.
• Access: While UNG is not listed on the ASX, most Australian brokers with international market access (e.g., Stake, IG, SelfWealth) allow trading in US ETFs like UNG. Always check platform fees and minimums.

Case in point: If you’d bought UNG in late 2023 at USD 12, you could have seen your position nearly double by March 2025—if you had the nerve to ride out the volatility. But those who entered during 2022’s highs are still underwater, illustrating the need for timing and risk tolerance.

UNG vs. Other Energy ETF Options

UNG is unique in its pure-play exposure to US natural gas. However, Australians might also consider:

• Global Energy ETFs: Broader funds like iShares Global Energy ETF (IXC) or Vanguard Energy ETF (VDE) offer diversified exposure to oil and gas majors, including those with large natural gas operations.
• ASX-Listed Alternatives: While there’s no direct UNG equivalent on the ASX, ETFs like BetaShares Global Energy Companies ETF (FUEL) provide energy sector exposure without the commodity price risk.
• Local Gas Stocks: ASX-listed producers such as Santos (STO) and Woodside Energy (WDS) are alternatives for those preferring equities to futures-backed ETFs.

Each option comes with different risk-return profiles, tax implications, and sector exposures—so consider your investment goals before deciding.

Conclusion: Is UNG a Smart Play for Australians in 2025?

The United States Natural Gas Fund is a high-octane tool for those betting on US natural gas price swings. For Australians seeking to diversify into global energy or hedge against local market risks, UNG offers a direct route—but it’s not without complexity. Stay on top of US policy shifts, weather trends, and be prepared for a bumpy ride. If you’re after global energy exposure but want less drama, consider diversified ETFs or local producers instead.