Why DGAZ Is Poised to Keep Plunging

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

With that in mind, let's take a closer look at DGAZ and see what CAPS investors are saying about the ETF right now.

DGAZ facts


February 2012

Total Net Assets

$62.7 million

Investment Approach

The investment seeks to replicate 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-Month / 3-Month / 1-Year Return

3% / (47.8%) / (86.5%)


ProShares UltraShort Silver

ProShares UltraShort Gold

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

On CAPS, 89% of the 175 members who have rated DGAZ believe the ETF will underperform the S&P 500 going forward.

Just last week, one of those Fools, All-Star TerryHogan, succinctly summed up the DGAZ bear case for our community:

I'm not bullish on NatGas prices -- far from it actually. But I also don't think they can crater from these levels, or companies will have to stop selling it. I'm really just bearish on all leveraged ETFs, inverse ETFs especially. Easy long term red-thumb.

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The article Why DGAZ Is Poised to Keep Plunging originally appeared on Fool.com.

Fool contributor Brian Pacampara owns no position in any of the companies mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Fool's disclosure policy always gets a perfect score.

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