The outlook for low natural gas prices seems dim. What better time to introduce a new vehicle to invest in natural gas. With all of the controversy surrounding the United States Natural Gas Fund (UNG) just barely in the rear view mirror, UNG's sponsor is launching yet another natural gas ETF this Wednesday. This ETF aims to mitigate the effects of contango. As U.S. Commodity Funds did with oil, introduction of the United States 12 Month Oil Fund, LP (USL), the fund generally will hold a complete basket of the next 12 months' futures contracts (as opposed to UNG, which simply holds the upcoming month). Two weeks before the expiration of the nearest-month contract, the fund will roll forward another month, picking up the then-12-months-out contract.
The "United States 12 Month Natural Gas Fund" will invest in Natural Gas Interests to the fullest extent possible without being leveraged or unable to satisfy its current or potential margin or collateral obligations with respect to its investments in Futures Contracts and Other Natural Gas-Related Investments.
The investment objective of the "United States 12 Month Natural Gas Fund" is to have the changes in percentage terms of its units' net asset value ("NAV") reflect the changes in percentage terms of the spot price of natural gas delivered at the Henry Hub, Louisiana, as measured by the changes in the average of the prices of 12 futures contracts on natural gas traded on the NYMEX, consisting of the near month contract to expire and the contracts for the following 11 months, for a total of 12 consecutive months' contracts.
It is not the intent of the "United States 12 Month Natural Gas Fund" to be operated in a fashion such that its NAV will equal, in dollar terms, the spot price of natural gas or any particular futures contract or contracts based on natural gas. The "United States 12 Month Natural Gas Fund" will invest in interests other than the Benchmark Futures Contract to comply with accountability levels and position limits.
The "United States 12 Month Natural Gas Fund" will invest in Natural Gas Interests to the fullest extent possible without being leveraged or unable to satisfy its current or potential margin or collateral obligations with respect to its investments in Futures Contracts and Other Natural Gas-Related Investments.
The investment objective of the "United States 12 Month Natural Gas Fund" is to have the changes in percentage terms of its units' net asset value ("NAV") reflect the changes in percentage terms of the spot price of natural gas delivered at the Henry Hub, Louisiana, as measured by the changes in the average of the prices of 12 futures contracts on natural gas traded on the NYMEX, consisting of the near month contract to expire and the contracts for the following 11 months, for a total of 12 consecutive months' contracts.
It is not the intent of the "United States 12 Month Natural Gas Fund" to be operated in a fashion such that its NAV will equal, in dollar terms, the spot price of natural gas or any particular futures contract or contracts based on natural gas. The "United States 12 Month Natural Gas Fund" will invest in interests other than the Benchmark Futures Contract to comply with accountability levels and position limits.
