In Defense of UNG and Other ETFs

By on August 22, 2009

Dave Nadig at rants about the uproar over several ETFs including U. S. Natural Gas (UNG). Nadig writes, “With all of the hubbub about leverage and inverse ETFs, and the premiums and discounts that have plagued UNG, where’s the outrage over active management and this dinosaur of a sales model?”

Nadig makes a good point that active managers are severely handicapped against ETFs, and only a few can outperform an index over the long term. The burden of their costs and managing through panicky outflows is too much to overcome.

SMA Comment/Disclosure: I initiated a position in UNG yesterday at $11.31 in my personal account.


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