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Is levETC in natural gas highly infected by contago effect in the futures markets?what about spread between gas and oil?

Easy way to check, compare the spot price in natural gas over the last year with the performance of the fund. Or complicated way, read their prospectus and look for details of the roll strategy. If they protect against this, they'll boast about it.

where can I find spot price?I find only NG futures at nymexIs it possible if they don't procted that ETC goes to zero, for contago effect?

Can you let me know who's the provider of the fund or ideally the underlying index, if any? If I can read the prospectus I'll be able to tell you.Sorry, I get my prices from datastream, you're right, historical prices are not publicly available. In terms of weakness of the best-known commodity indexes during contango (most apparent last year, somewhat diminished problem now), I'd say S&P GSCI is worst, S&P GSCI Enhanced only a bit better, DB Optimized Yield somewhat better, and the UBS CMCI are best as long as you buy the entire 'horizontal'.

ETFS Leveraged Natural Gas Isin: JE00B2NFTQ41Underlyning: The Dow Jones-UBS Natural Gas Sub-IndexSMthe prospectus is here: http://www.etfsecurities.com/it/documen ... rm.aspxCan you give me some informations about this product, I don't have a big knowledge about ETcThanks a lot'sStefanoCan you give me the title of a good book about this kind of problems?

Caveat, I don't fully understand the difference between ETN, ETC and ETF. These are mainly legal differences, but one factor is you get different amounts of counterparty risk. In happy times, this won't make any much (any?) difference, but if banks or funds may be going bankrupt, this may affect your decision, so it's worth looking into.The URL you provide links me to http://www.etfsecurities.com/csl/lev/et ... #indexThis says the fund is a 200% play on the underlying index, DJ-UBS Natural Gas Sub-Index. I assume you are with me so far.The DJ-UBS Commodity Indexes are described at http://www.djindexes.com/mdsidx/downloa ... mer.pdfThe table (exhibit 1) shows that there's no intelligent roll strategy. In January, we hold the March future. In February, we hold the March future, rolling over between the 5th to the 10th of the month to the May future. So we always hold the first or 2nd maturity future. Factor #2 (further down that document) clarifies that during backwardation, we will benefit from the 'roll yield' and during contango will will suffer. Nothing in the description of the index implies they do any kind of optimised strategy to avoid being 'infected' by contango, to use your graphic term.For a description of techniques and funds which try to avoid contango negative roll yield issues, see http://dbfunds.db.com/Pdfs/dbindexguide2007.pdf - Deutsche Bank 'optimised yield' products, which make a good effort at solving the problem.http://www.ubs.com/4/investch/cmci/pdf/ ... tsheet.pdf - UBS Constant Maturity Commodity Indexes, which aim to solve the problem by diversifying across many maturities, and also by saying 'let the investor choose for themself if they prefer'.

QuoteOriginally posted by: willsmithCaveat, I don't fully understand the difference between ETN, ETC and ETF. These are mainly legal differences, but one factor is you get different amounts of counterparty risk. In happy times, this won't make any much (any?) difference, but if banks or funds may be going bankrupt, this may affect your decision, so it's worth looking into.I think the difference betwen ETN, ETC and ETF is just the category of the underlying of the index. Counterpartyrisk depends more on the replication strategy of the ETF provider. If they track the index by buying the underlying, they have high collateral and so CP risk is pretty low. If they track via swaps then they still have assets as collateral but in case their swap counterparty defaults on a swap which is favourable for the ETF provider, then the investors face losses as well. AFAIK, there is regulatory limits on the exposure to swap CPs ( something like max 10% of AUM my be swaped with one party)

Somebody can help me to understand UNG (us natural gas fund) or Gaz (dow-jones ubs natural gas) or other etf on natural gas...they seems to tend to zero for contago effect, it is possible?that they go to zero?they seems derivative on term structure futures of gasI search in google about this eft and I find that they are highly influenced by contago effect, but I don't find anythings specif about how much contago influence their value,I think they are not strument sfor retail investitor if they tend to zero for the forward structure of gas and rolls.