1-Star ETNs Poised to Plunge: VelocityShares 3x Inverse Natural Gas?

Motley Fool Staff
Updated

Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, VelocityShares 3x Inverse Natural Gas ETN (NYSE: DGAZ) has received the dreaded one-star ranking.

With that in mind, let's take a closer look at VelocityShares 3x Inverse Natural Gas and see what CAPS investors are saying about the ETN right now.

VelocityShares 3x Inverse Natural Gasfacts

Inception

February 2012

Total Net Assets

$16.1 million

Investment Approach

Seeks to replicate, net of expenses, three times the opposite (inverse) of the S&P GSCI Natural Gas Index. The index comprises futures contracts on a single commodity and is calculated according to the methodology of the S&P GSCI Index.

Expense Ratio

1.65%

1-Week / 1-Month / 3-Month

(32.5%) / (48.7%) / (56.9%)

Alternatives

VelocityShares 3x Long Natural Gas ETN
United States Natural Gas

Sources: S&P Capital IQ and Motley Fool CAPS.

On CAPS, 93% of the 137 members who have rated VelocityShares 3x Inverse Natural Gas believe the ETN will underperform the S&P 500 going forward.

A couple of months ago, one of those Fools, All-Star TerryHogan, succinctly summed up the bear case for our community: "First of all, while [natural gas] hasn't exactly been a stellar investment as of late, it doesn't really have much lower to possibly go. Second of all, 3X leveraged ETFs are crap long-term."

If you want market-thumping returns, you need to protect your portfolio from any undue risk. Luckily, our special report on ETFs highlights three funds that are poised to soar in the next recovery. It's 100% free, but won't last forever, so click here to access it now.

Want to see how well (or not so well) the stocks in this series are performing? Follow theTrackPoisedToCAPS account.

Advertisement