United States Natural Gas Performance Is A Complete Disaster

Disciplined Investor conveniently charts the latest performance for both United States Natural Gas (UNG), and the Natural Gas Futures many use it as a proxy for. We previously discussed how contango (higher prices for longer-dated futures contracts) is destroying this fund’s value as it rolls from a lower-priced maturing contract into the next longer-term higher priced contract.

The fact that this simple market phenomenon, contango, ruins the entire ETF shows that this product wasn’t constructed with very much foresight to begin with. While Disciplined Investor graciously highlights that at times ‘you can still make some money on it’, the odds seem heavily stacked against UNG investors given the fund’s massive drag. How is UNG not a disaster?


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