Interestingly, UGAZ is the largest “Natural Gas” linked product in the U.S. landscape at the moment, bigger than even the $619 million “benchmark” name in the space UNG (United States Natural Gas Fund, Expense Ratio 1.12%). UNG debuted way back in 2007 and has recently attracted about $75 million in new assets via creation appetite, but UGAZ, which debuted in 2012 has proven to be a favorite of traders and short term directional speculators whom may be playing Natural Gas prices through ETPs.
For example, UGAZ averages more than 15.6 million shares traded on an average daily basis as compared to UNG’s 6.7 million shares, and UGAZ’ sister ETN DGAZ (VelocityShares 3X Inverse Natural Gas, Expense Ratio 1.65%) is rather popular as well averaging 3.8 million shares on an average daily basis and slotted as the third largest ETP in the Natural Gas category with about $107 million in AUM.
Judging from the huge move higher that we have seen in Natural Gas prices this morning, the recent inflows in the ETP space especially concerning UGAZ appear to be very well timed.
The VelocityShares 3X Long Natural Gas ETN (UGAZ) was trading at $10.31 per share on Monday morning, up $1.13 (+12.31%). Year-to-date, UGAZ has declined -77.68%, versus a 16.79% rise in the benchmark S&P 500 index during the same period.
UGAZ currently has an ETF Daily News SMART Grade of F (Strong Sell), and is ranked #13 of 24 ETFs in the Leveraged Commodities ETFs category.
Disclaimer: The content of this article is excerpted from a daily newsletter from Street One Financial. While ETF Daily News may edit the contents and add a relevant title to the piece, the author, Paul Weisbruch, does not endorse or recommend any issuer or security mentioned herein.
Paul Weisbruch is the VP of ETF/Options Sales and Trading at Street One Financial. Prior to joining the team at Street One, Paul served as the Director of RIA and Institutional ETF Sales at RevenueShares ETFs from December 2007 until November of 2009. Before RevenueShares, Paul was employed by Susquehanna International Group from 2000 until 2007 serving in roles including OTC/NYSE Institutional Block Trading, Nasdaq/OTC Market Making, ETF/Derivatives Intelligence and Strategy, Algorithmic Trading, as well as acting as the PHLX Floor Specialist in the ETFs, SPY and DIA.Paul has been actively involved in the ETF space from both a product and trading standpoint since 2000. Additionally, Paul has well forged relationships with national RIAs, institutional pension fund managers and consultants, mutual fund and hedge fund managers, and also the ETF media. Co-authoring the “S1F ETF Daily” since 2009, the daily piece has become a must for many portfolio managers in the ETF space, with segments regularly appearing in the likes of Barron’s, WSJ, and ETFTrends.com for instance.
He holds his Series 4 (Registered Options Principal), 6, 7, 55 (Equity Trader), 63, and 65 licenses. He graduated from the University of Pittsburgh (B.S. – Economics), graduating magna cum laude, and has an MBA from Villanova University.
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