The largest ETP tracker of Natural Gas futures, UNG (United States Natural Gas Fund, Expense Ratio 0.60%) has seen an uptick in options activity lately on a steady winning streak in terms of price performance since earlier this month.
The January 21 calls, which are about 6.5% out of the money at current levels have been active in particular, and despite the recent run-up in price in UNG, the fund has still staggered a bit this year in terms of asset levels ($-362 million) via redemption activity.
UNG now has net assets of about $902 million and robust daily trading activity (4.6 million shares ADV). A name that is likely not familiar with all, UGAZ (VelocityShares 3X Long Natural Gas ETN, Expense Ratio 1.65%)
has impressively grabbed new assets this year, raising its overall asset level to $128 million. As its name suggests, this ETN is intended for leveraged daily returns on the long side and it has become quite popular with Oil & Gas traders and hedgers alike this year (1.3 million shares ADV).
The presence of UGAZ seems to have eaten into some of the market share of ProShares, as their leveraged long Natural Gas product BOIL (ProShares Ultra DJ-UBS Natural Gas, Expense Ratio 0.95%)
has been relatively flat in terms of asset raising this year (+$4.6 million). Both of these leveraged long products should be watched closely especially given the presence of recent call activity in UNG.
On the flipside, some levered funds that are utilized by Natural Gas bears are DGAZ (VelocityShares 3X Inverse Natural Gas ETN, Expense Ratio 1.65%) and KOLD (ProShares UltraShort DJ-UBS Natural Gas, Expense Ratio 0.95%) and these are also not likely household names, but they have seen periodic upticks of interest as a function of the volatility of Natural Gas prices.
An unlevered fund in the space that was released in 2009 to combat some of the futures contango issues that have occurred in the past relevant to UNG has surprisingly not gathered more momentum in terms of assets raised, and that fund is UNL (U.S. 12 Month Natural Gas, Expense Ratio 0.75%). The fund has raised $28 million thus far despite convincing head to head returns since inception
when compared to the much larger UNG.
U.S. Natural Gas Fund
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