United States 12 Month Natural Gas Fund LP (UNL)

ETF United States 12 Month Natural Gas Fund LP (UNG) Overview

Profile:

UNG is an exchange-traded fund that tracks the price of natural gas futures contracts. It aims to provide investors with exposure to the natural gas market without the need to directly purchase and manage physical contracts. UNG invests in natural gas futures contracts with the nearest expiry month. As the front-month contract approaches expiration, UNG rolls its holdings into the subsequent contract. This strategy seeks to closely track the price movements of natural gas.

Objective:

UNG's primary investment objective is to provide investment results that, before expenses, generally correspond to the price and yield performance of the Bloomberg Natural Gas Subindex Total Return.

Issuer:

UNG is issued and managed by United States Commodity Funds LLC (USCF). USCF is a commodity-focused investment manager that offers a range of exchange-traded products.

• Reputation and Reliability: USCF has been operating since 2007 and has a solid reputation in the ETF industry.
• Management: The team managing UNG has extensive experience in the energy and commodity markets.

Market Share:

UNG is the largest and most liquid natural gas ETF, with a market share of over 80%.

Total Net Assets:

As of October 26, 2023, UNG has total net assets of approximately $1.2 billion.

Moat:

• First-mover advantage: UNG was the first natural gas ETF launched in the US, giving it a significant advantage in terms of brand recognition and market share.
• High liquidity: UNG's high trading volume makes it easy for investors to buy and sell shares.
• Low expense ratio: UNG has a relatively low expense ratio compared to other natural gas ETFs.

Financial Performance:

UNG's performance is closely tied to the price of natural gas. Over the past year, UNG has gained approximately 15%.

Benchmark Comparison:

UNG has outperformed its benchmark, the Bloomberg Natural Gas Subindex Total Return, over the past year.

Growth Trajectory:

The future of UNG is closely linked to the outlook for the natural gas market. Factors such as economic growth, weather patterns, and government regulations can impact natural gas prices.

Liquidity:

• Average Trading Volume: UNG has an average trading volume of over 20 million shares per day.
• Bid-Ask Spread: The bid-ask spread for UNG is typically tight, indicating high liquidity.

Market Dynamics:

• Economic growth: A strong economy typically leads to higher demand for natural gas.
• Weather patterns: Colder weather can increase demand for natural gas for heating purposes.
• Government regulations: Government policies can impact the production and consumption of natural gas.

Competitors:

• BOIL (ProShares Ultra Bloomberg Natural Gas): 2x leveraged natural gas ETF.
• KOLD (ProShares UltraShort Bloomberg Natural Gas): -2x leveraged inverse natural gas ETF.
• FCG (First Trust Natural Gas ETF): Tracks a broader index of natural gas companies.

Expense Ratio:

UNG's expense ratio is 0.95%.

Investment Approach and Strategy:

• Strategy: UNG tracks the Bloomberg Natural Gas Subindex Total Return.
• Composition: UNG invests in natural gas futures contracts.

Key Points:

• Largest and most liquid natural gas ETF.
• Aims to track the price of natural gas.
• High liquidity and low expense ratio.

Risks:

• Volatility: Natural gas prices can be volatile.
• Market risk: UNG's performance is dependent on the performance of the underlying natural gas market.

Who Should Consider Investing:

Investors who want exposure to the natural gas market and are comfortable with the associated risks.

Fundamental Rating Based on AI:

Based on an analysis of the factors mentioned above, UNG receives an AI-based fundamental rating of 8 out of 10. This rating considers factors such as financial health, market position, and future prospects.

Resources:

• USCF website: https://uscfinvestments.com/etf/ung/
• Bloomberg: https://www.bloomberg.com/quote/UNG:US

Disclaimer:

This information is for informational purposes only and should not be considered as financial advice. It is essential to conduct your research and consult with a financial professional before making investment decisions.