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New ETF Will Track Natural Gas Price

by: SA Editor Eli Hoffmann April 19, 2007 | about stocks: UNG    
Eli Hoffmann

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Victoria Bay Asset Management announced Wednesday the launch of its much-awaited United States Natural Gas Fund (UNG), which began trading at about $50/share. Share value will reflect changes in the price of natural gas delivered at the Henry Hub, La., although the dollar value of shares will not reflect in dollar terms the price of spot natural gas nor its futures contracts. The fund will invest in natural gas futures contracts, generally the two months closest to expiration. UNG does not use leverage in its portfolio. The fund's expense ratio is 0.6%, not including brokerage costs on the futures contracts. Because the fund is a commodity pool and doesn't invest in registered securities, it is not covered by the Investment Company Act. The fund is Victoria Bay's second; its first fund, United States Oil Fund ETF (USO), tracks the price of crude oil, and currently has assets of about $800 million. UNG closed up 0.47% yesterday to $50.77 on volume of 41,800 shares.

Sources: Press release, AMEX, MarketWatch, TheStreet.com
Commentary: A Natural Gas Primer • David Fry's Market Outlook for Thursday
Stocks/ETFs to watch: United States Natural Gas ETF (UNG). Broad Energy ETFs: Energy Select Sector SPDR ETF (XLE), iShares Dow Jones US Energy Sector ETF (IYE), PowerShares Dynamic Energy & Exploration (PXE)
Related: Fund Prospectus, Wikipedia on Investment Company Act of 1940

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This article has 1 comment:

  •  
    Apr 19 09:53 AM
    The way I read the prospectus, it is a commodity limited partnership and not an ETF. An ETF according to the SEC is an open-end investment company regulated by ICA 1940. The UNG prospectus say it is not an investment company and not subject to the ICA.

    "USNG is not a mutual fund registered under the Investment Company Act of 1940 and is not subject to regulation under such Act."
    Reply
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