For investors seeking momentum, United States 12 Month Natural Gas Fund (AX:UNL) is probably on radar now. The fund just hit a 52-week high, and is up 20.2% from its 52-week low price of $8.54/share.
But are more gains in store for this ETF? Let’s take a quick look at the fund and the near-term outlook on it to get a better idea on where it might be headed:
UNL in Focus
This product seeks to offer spread out exposure across the futures curve in order to mitigate contango, a huge problem in the natural gas ETF market. The investment objective of UNL is for the daily changes in percentage terms of its shares NAV to reflect the daily changes in percentage terms of the price of natural gas delivered at the Henry Hub Louisiana, as measured by the daily changes in the average of the prices of UNL's Benchmark Futures Contracts, less UNL's expenses.
UNL's benchmark is the near month futures contract to expire and the contracts for the following 11 months, for a total of 12 consecutive months. If the near month futures contract is within two weeks of expiration, the benchmark will be the next month contract to expire and the contracts for following 11 consecutive months. UNL charges 90 basis points in annual fees (read: all the energy ETFs here).
Why the Move?
The natural gas space has been an area to watch lately given the surge in its price. Cold weather increases fuel demand for heating purpose, thereby leading to higher natural gas consumption. Investors should note that November-March is generally the peak demand period for gas consumption in the United States.
More Gains Ahead?
It seems that UNL might remain strong given a positive weighted alpha of 7.60% and a moderate 20-day volatility of 17.79%. As a result, there is definitely still some promise for investors who want to ride on this surging ETF a little further.
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US-12M NATL GAS (UNL): ETF Research Reports
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Zacks Investment Research
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Natural Gas ETF (UNL) Hits New 52-Week High
Published 11/11/2018, 10:08 PM
Updated 07/09/2023, 06:31 AM
Natural Gas ETF (UNL) Hits New 52-Week High
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