Natural gas up 100% from 1 year ago, my UNG up only 41% from year ago... (fund, trading)

[killer2021]

Was looking at the performance of my UNG stock, bought it one year ago and so far it has a 41% gain.

Meanwhile, the price of natural gas in the exact same time period increased over 100%, from 2$/mmbtu to 4$+/mmbtu today.

I was under the impression that UNG tracks the price of natural gas on the henry hub? Seems like the results are pretty poor. I didn't get to gain that extra 59% even though I clearly risked my capital. I could understand if UNG only tracked it by 95%, due to fees, but to have the spread so wide seems absolutely unacceptable to me.

Is there any way I can trade commodities that tracks the spot price more accurately?

[celcius]

Someone didn't read his or her prospectus.

From Morningstar:

UNG invests in near-month natural gas futures contracts trading on the Nymex in an attempt to track the price of natural gas. Keep in mind, however, that this fund will not track natural gas spot prices. The proper use of this product would be as a small tactical position in the satellite portion of a broadly diversified portfolio. Intrepid investors and more aggressive traders may also look to UNG as a convenient means to speculate on natural gas prices over very short periods.

Best to stay away from commodities. No intrinsic value anyway.

[Listener2307]

Originally Posted by killer2021

Was looking at the performance of my UNG stock, bought it one year ago and so far it has a 41% gain.

Meanwhile, the price of natural gas in the exact same time period increased over 100%, from 2$/mmbtu to 4$+/mmbtu today.

I was under the impression that UNG tracks the price of natural gas on the henry hub? Seems like the results are pretty poor. I didn't get to gain that extra 59% even though I clearly risked my capital. I could understand if UNG only tracked it by 95%, due to fees, but to have the spread so wide seems absolutely unacceptable to me.

Is there any way I can trade commodities that tracks the spot price more accurately?

I don't really know how to track natural gas as a commodity, but take to heart what Celcius has pointed out about UNG trading near term futures contracts. Most people don't consider that strategy to be one worth following.

Hopefully, you won't have to, but you should see what happens to investors when natural gas goes down!

Actually, without being speculative, I think it's going to be hard to make money off the natural gas shift. And I do thing we are shifting away from petroleum (not totally, though) towards natural gas.

Here are the players, though:
APD; CHK; CLNE; CMI; FSYS; GTLS; LNG; PSIX; TA; TTM; WPRT and, of course your UNG and lots of others.

I am long CLNE as a speculator. Some of these are good solid investments; others more speculative.