The fund managers of a the largest natural gas-related exchange traded fund (ETF) are being forced to change the makeup of their fund in order to manage the size of the fund while ensuring that it tracks the price of natural gas, as well.
United States Natural Gas (NYSEArca: UNG) will undergo some changes to its investment strategy to better manage the funds size and track the price of natural gas, reports Jon C. Ogg for 24/7 Wall St.
A recent filing with the Securities and Exchange Commission (SEC) revealed that UNG invested “primarily in futures contracts for natural gas, crude oil, heating oil, gasoline, and other petroleum-based fuels.”
While these will still be the primary vehicles, other ones the fund’s managers are considering include cash-settled options on futures contracts, forward contracts for natural gas, cleared swap contracts and over-the-counter transactions based on the price of natural gas, crude oil, other petroleum-based fuels, futures contracts and indexes. (Read about how swaps work in an ETF).