Closed end funds can trade a premium or discount for very long periods of time. One CEF I bought at a 16% discount around February. It's discount now is 11% but I've made 25% off the purchase. At this point, I'll wait until October for the another 30% of that holding to become a LT Cap gain. So unless things get bad fast, I can hold on.
UNG is the 17th largest ETF holding amongst Hedge Funds? As of the latest Hedge Fund data, which would be 6/30/09, 34 have ownership in UNG with $121 Million Long and $98 Million short.
Also, the second biggest holding, SPY, was $4,004 Million Long vs. $21,666 million short (6/30/09). Sounds like a crowded trade seeing that the SPY is up 11% as of today's close since 7/1/09.
USO is up there too, but it's about a 1:4 long/short. I'm sure there's a play on short oil, long gas with these ETF's. Commodity ETF's aren't being bought only by people like us who are clueless.
As for UNG, I think I heard before that Nat Gas prices are going to stay low for a long time to come. I also heard we're in for a cold winter. I remember some of the calls for Oil to stay below $55 a barrel earlier in the year. Yep, kick 'em when they're down; the media is good at that. We've still got folks looking for an entry point in the general stock market because of the media.
Source: GS Hedge Fund Trend Monitor