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

 

 

Inception

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

1.65%

1-Month / 3-Month / 1-Year Return

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

Alternatives

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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