UNL Profile
The United States 12 Month Natural Gas Fund, LP is an investment fund designed to offer exposure to natural gas prices by holding a diversified portfolio of natural gas futures contracts. The funds investment strategy involves maintaining positions in futures contracts that represent a full 12-month period, capturing the price movements of natural gas across different contract maturities. This approach allows investors to gain broad exposure to natural gas markets over an extended time frame.
The fund primarily invests in futures contracts traded on the New York Mercantile Exchange (NYMEX). It holds the near-month futures contract and then rolls over to the subsequent contracts for each of the following eleven months, resulting in a total of twelve consecutive monthly contracts. This method of holding futures contracts aims to track the performance of natural gas prices across various maturities, providing a comprehensive view of the market.
However, the fund makes an exception for the near-month contract, which is avoided if it is within two weeks of expiration. In such cases, the fund will roll over to the next available contract to avoid the issues associated with the near-month contract's approaching expiration. This rolling strategy helps manage liquidity and reduces the potential for adverse effects from the contracts imminent expiration.
The United States 12 Month Natural Gas Fund, LP is designed for investors seeking exposure to natural gas prices without directly trading futures contracts themselves. By maintaining a portfolio of contracts with staggered expiration dates, the fund aims to mitigate the effects of contango and backwardation, which can impact futures markets. This structure offers a way to participate in the natural gas market while diversifying across different contract periods.
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