It aims to deliver twice the inverse (-2x) of the daily return of the Bloomberg Natural Gas Subindex, making it a tool for those looking to profit from falling natural gas prices.
Like the previous ETF described, this one uses natural gas futures contracts, with cash equivalents held as collateral to maintain margin requirements.
However, it is not suitable for long-term holding. It suffers from the same contango effects that can erode value. Like all leveraged ETFs, it experiences volatility drag, where daily resets lead to compounding losses over time, especially in choppy markets.
The result is a 10-year annualized return of -19.35%, proving how destructive holding an inverse ETF for extended periods can be.
This ETF also carries a 0.95% expense ratio, making it a costly but effective short-term trading tool for those looking to bet against natural gas.