Natural gas prices, which face persistent downward pressure in 2023 amid sizable supplies and weak demand, dropped in March more than any other category measured by the federal government’s key inflation reading. Prices have continued to drop since then.

The benchmark Bloomberg Natural Gas Subindex has fallen by 70% in the past year, in stark contrast with the 22% gain in the S&P 500 Index as of June 20.

The United States 12 Month Natural Gas Fund LP (UNL) and the United States Natural Gas Fund LP (UNG) are the only natural gas ETFs that trade in the U.S., excluding inverse and leveraged funds.

Look more closely at the performance of these two U.S. natural gas ETFs in 2023. All data are as of June 16.

Natural Gas ETF with Best 1-Year Return and Lowest Fees: United States 12 Month Natural Gas Fund LP

• Performance Over One Year: -51.3%
• Expense Ratio: 0.90%
• Annual Dividend Yield: N/A
• Three-Month Average Daily Volume: 19,366
• Assets Under Management: $16.3 million
• Inception Date: Nov. 18, 2009
• Issuer: USCF Investments

UNL comprises the near month and following 11 months' natural gas futures contracts trading on the NYMEX, with each month being equally weighted. This fund also invests in swap contracts and forwards.

UNL is ideal for investors interested in natural gas exposure without the risk of trading futures contracts. It is also a less-volatile alternative to UNG.

Most Liquid Natural Gas ETF: United States Natural Gas Fund LP (UNG)

• Performance Over One Year: -71.6%
• Expense Ratio: 1.06%
• Annual Dividend Yield: N/A
• Three-Month Average Daily Volume: 22,057,920
• Assets Under Management: $1.11 billion
• Inception Date: April 18, 2007
• Issuer: USCF Investments

UNG is structured as a commodity pool, a private investment structure that combines investor contributions to trade commodity futures contracts. The fund provides exposure to natural gas prices by buying natural gas futures contracts. UNG aims to replicate the percentage change on a daily basis of the price of natural gas delivered at Henry Hub in Louisiana.

UNG invests in front-month futures contracts, meaning the futures contracts with the nearest expiration dates. This means the fund is more exposed to the adverse impacts of contango and is thus more appropriate for traders with a short-term strategy. This ETF also may be appealing as an inflation hedge.

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As of the date this article was written, the author does not own any of the above ETFs.