ETF Research and Analysis

by John Gabriel
United States Natural Gas UNG could be suitable as a tactical investment for those who believe natural gas prices are poised to increase in the short to intermediate term. Because of the extremely specialized exposure of   Read more 

Bull Case

UNG provides a convenient and relatively inexpensive means for gaining exposure to natural gas futures.
For those inclined to speculate on short-term natural gas prices, UNG can be an efficient and effective means to that end.
UNG's straightforward approach of buying near-month Henry Hub natural gas futures contracts provides a reasonable proxy to short-term natural gas spot prices. Read more 

Bear Case

In the past, this fund has been the poster child for demonstrating how returns to futures-based strategies can deviate from commodity spot prices. Beware of contango.
There are special tax considerations related to UNG's limited partnership structure.
Position limitation regulation could cause this fund to cease share issuance and trade at significant premiums or discounts to net asset value, much like a closed-end fund. Read more 

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