Minyanville Sat 2009-09-05 11:47 EDT
Why Hanging On to UNG Is Risky Business
People have been up in arms for months now about the troubles at the United States Natural Gas Fund LP (UNG) the ETF designed to track the price of natural gas. And as far as I can tell rightly so. ETFs were meant to be a nearly frictionless relatively simple alternative to the clunky closed-end funds (CEFs) and managed products that our parents and grandparents had to contend with. But UNG recently traded at a 19% premium to its net asset value (NAV) -- behavior far more fitting a CEF...But since hand-wringing over UNG seems to be the consensus approach, here's a contrarian thought: UNG has, to date, tracked natural gas futures (NG) fairly well.