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ETF Chart of the Day: Gas Up


Natural Gas prices have skyrocketed since early November but UNG (United States Natural Gas Fund, Expense Ratio 0.60%) has hit some resistance in recent sessions near the $22 level.

This has not stopped the fund from pulling in new assets on heavier trading volume in the ETF, with UNG reeling in about $160 million in the past several sessions.

The fund now has $958 million in assets under management and averages a whopping 5 million shares traded daily, despite the rampant criticism about how the fund actually delivers returns via its methodology in investing in Natural Gas futures.

In fact, UNG remains the largest fund in the Natural Gas commodity space by a mile, with the second largest fund in the space that is not leveraged being UNL (United States 12 Month Natural Gas Fund, Expense Ratio 0.75%), which only has about $28 million in AUM, and was brought to the market by the same fund sponsor as UNG.

Leveraged/trading designed products get a fair amount of play in the Natural Gas space which should probably not be unexpected given the historical volatility and trade-ability of Natural Gas and the good number of energy focused funds that will try to trade these markets, and products that have become somewhat popular here include UGAZ (VelocityShares 3X Long Natural Gas ETN, Expense Ratio 1.65%), DGAZ (VelocityShares 3X Inverse Natural Gas ETN, Expense Ratio 1.65), BOIL (ProShares Ultra DJ-UBS Natural Gas, Expense Ratio 0.95%) and KOLD (ProShares Ultra DJ-UBS Natural Gas, Expense Ratio 0.95%).

For the time being however, it appears that the Natural Gas futures ETP market has a dominant force in UNG.

United States Natural Gas Fund

For more information on Street One ETF research and ETF trade execution/liquidity services, contact Paul Weisbruch at pweisbruch@streetonefinancial.com.

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