Table of contents
- UNG fund is an exchange-traded fund
- DGAZ an investment bank
- R-squared of 26%
- Tracking the same underlying asset
UNG is a fund that aims to track the performance of an underlying asset. However, there are several other factors to consider when making investment decisions. Here are some of them.
UNG fund an exchange-traded fund
UGAZ Fund is an exchange-traded fund that tracks the price of natural gas. It was launched by Victoria Bay Asset Management in April 2007. Today it is the largest natural gas ETF with the base of a future.
UNG’s objective is to mirror daily changes in the Henry Hub natural gas price. It buys and sells front-month gas contracts to maintain its exposure to the price of natural gas. It reports twice a month.
- The fund had total net assets of $660 million at the start of March.
- It entered the month with 39 million shares outstanding.
- It had lost 4.9% for the same period, and it had gained 13% year-to-date.
- The fund reported that it had 80% of the open interest on the June contract on the New York Mercantile Exchange.
- It also stated that it was awaiting SEC approval on its application for up to one billion more units.
Investors are pouring money into the fund. It is expected that natural gas prices will rise in the future. But there is some concern that UNG may be artificially keeping gas prices high. The fund could face regulatory restrictions on the types of investments it makes.
- A monthly roll cost:
- The fund has a monthly roll cost, which adds up over time.
- When UNG buys a front-month contract, it pays a premium to roll it to the next near-month contract.
- It then sells the contract at a lower price.
- In order to maintain its exposure to the price of natural, it must move its exposure every 30 days to the next monthly contract.
It is expected that prices will rise in the second quarter of 2020. However, it is unclear whether or not the G-7 nations will implement a significant energy price control measure. In the meantime, it is expected that the demand for natural gas will increase due to power generation needs.
DGAZ an investment bank UGAZ Fund
Despite the fact that it was bailed out by some of the largest names in finance, it’s not like DGAZ is an investment bank or hedge fund that’s out of business. The NYSE ARCA is where these two trading entities trade. Despite the fact that UGAZ and DGAZ aren’t exactly complementary currencies, they have enjoyed some relative stability over the past few years. And while they may not be a good long-term bet, they are certainly viable propositions for seasoned investors.
As of this writing, UGAZ Fund has a market cap of $1.8 billion, compared to DGAZ’s $1.8 billion. Despite the fact that UGAZ is trading at a premium, it’s still not a bad bet. The stock has enjoyed a modest rally since its low of the year and will continue to do so as long as it maintains the top spot in the gas gauge rankings. And the fact that it’s a well-established gas pipeline makes it even more viable. It also helps that the company has recently acquired a gas pipeline from China, a market stalwart that is ripe for the taking.
- It’s no secret that the Ugazf and UGAZ are the big boys in the natural gas game, so it’s no surprise that they aren’t the cheapest options on your trading list.
- As a result, you need to be smart about what you invest in and in what form.
- The smartest way to do this is to use a diversified portfolio of natural gas proxies, such as UNG and UNL.
- With a hefty dividend to boot, these stores are a worthwhile addition to your portfolio.
- And if you aren’t a natural gas savant, you might as well consider an ETF to do the heavy lifting.
R-squared of 26%
UGAZF has an R-squared of 26% which is quite a feat in a market dominated by actively managed funds. This statistic doesn’t mean that UGAZF is better than its index, it just means that it’s a better fit for the aforementioned benchmark. It’s also worth noting that this statistic reflects the fact that the index and the fund have a symbiotic relationship, as illustrated by the fact that the fund has outperformed its benchmark by a wide margin in many instances.
- This statistic is not as impressive when you look at the overall performance of UGAZF:
- In October of 2022, the fund returned a whopping -37.2%, making it one of the worst-performing funds of the year. It’s also worth noting that UGAZF has a standard deviation of 227.3%, which is a big deal if you’re trying to calculate the risk associated with an investment.
- The fund also has a total risk rating of a whopping 1.65, which is a good deal more than most funds, allowing for a safe, yet aggressive approach to investing.
- UGAZF has a few other interesting statistics, including a hefty 621.65 beta, which is a good indicator of the volatility of the fund.
- It’s also worth noting that the fund is among the most liquid funds, with a market cap of $23 billion.
Overall, UGAZF has shown a healthy level of volatility, making it a good choice for investors looking to cash in on this cyclical market. It’s also worth noting that in the past five years, UGAZF has returned an average of -65.4% per year, which is more than twice as high as the average index fund.
Tracking the same underlying asset
UGAZ is a leveraged EFT that tracks the same underlying asset as UNG, a natural gas index. It is designed to magnify the daily performance of UNG by up to 200%. This allows traders to trade in the energy industry with confidence and is a great option when UNG is showing a bull flag.
If you are looking for a stock that can increase in value when the energy industry experiences a peak, UGAZ Fund is a good choice. It’s important to remember that UNG tracks the price of natural gas, and UGAZ can help you make the most of that price increase.
UGAZ is a triple-leveraged ETN that seeks three times the daily returns of the S&P GSCI Natural Gas Index. The index tracks the global natural gas market by using natural gas futures contracts. UGAZ is suitable for short-term natural gas price speculation, but it should not be considered a long-term investment for retail investors. It is also not appropriate for experienced traders.