DGAZVelocityShares 3X Inverse Natural Gas ETN
DGAZ Fund Description
The VelocityShares 3X Inverse Natural Gas ETN provides -3x the daily performance of the front-month futures contract on natural gas.
DGAZ Factset Analytics Insight
Like most geared inverse products, DGAZ is designed to be used as a tactical trading tool, not as a buy-and-hold investment. The note promises to provide -3x exposure to its reference index—the S&P GSCI Natural Gas Excess Return Index—for a one-day holding period. The daily reset function means investors holding DGAZ for periods of longer than one trading day will be exposed to the effects of compounding, and could see returns vary greatly from the headline -3x exposure. Since DGAZ tracks an excess return version of the S&P GSCI Natural Gas Index, returns will reflect the changes in the price of natural gas and returns from rolling futures contracts, but not any income from collateral. Although its fee is extremely high, trading costs are of greater importance, since the fund is designed for intraday round-trip trades. Fortunately, the market for DGAZ is reasonable: millions of shares change hands most days, and spreads are narrow though hardly airtight.
DGAZ CHARTS AND PERFORMANCE
DGAZ Factset Analytics Block Liquidity
This measurement shows how easy it is to trade a $1 million USD block of DGAZ. DGAZ is rated a 5 out of 5.