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United States 12 Month Natural Gas Fund
The US 12 Month Natural Gas Fund (UNL) uses a 12-month futures ladder to track Henry Hub gas prices, reducing contango losses inherent in front-month...
United States 12 Month Natural Gas Fund
The US 12 Month Natural Gas Fund, LP (ticker: UNL) was established in November 2009 by John T. Hyland, a veteran of commodity ETF structuring who previously co-founded the United States Oil Fund. The vehicle was created as a direct response to the well-documented contango losses suffered by its sister fund, the United States Natural Gas Fund (UNG), during the financial crisis. By holding a ladder of the 12 nearest-month NYMEX natural gas futures contracts instead of only the front month, the fund aims to mitigate the negative roll yield that results from repeatedly selling cheap near-term contracts and buying more expensive longer-dated ones. UNL tracks the performance of natural gas futures by maintaining positions across the full 12-month forward curve. Approximately one-twelfth of the portfolio is rolled each month into the new longest-dated contract. This structure spreads the cost of contango across twelve months, making the fund's returns more closely mirror the average spot price over a rolling year rather than the spot price of any single month. The underlying holdings are exclusively exchange-traded NYMEX natural gas futures contracts and related cleared swaps. Unlike private energy funds, UNL operates as a publicly traded commodity pool, offering daily liquidity to retail and institutional investors alike. As a product managed by Concierge Technologies (now known as Marygold Companies), the fund is part of a broader family of commodity pools including USO and UNG. John T. Hyland serves as Chief Investment Officer, and the portfolio is traded according to a mechanical, rules-based methodology published in the fund's prospectus, leaving little room for active management discretion. The fund does not invest in physical natural gas, pipelines, or private drilling partnerships, remaining entirely a financial futures vehicle. Regulatory and portfolio data is filed publicly with the SEC, given its status as an '40 Act-registered commodity pool. UNL's structural differentiator is its mechanical term-weighted holding period. While most commodity ETFs concentrate risk at the front of the futures curve, UNL distributes exposure evenly across the next 12 months of delivery. This architecture makes the fund suitable for investors seeking a broader, time-averaged view on natural gas prices rather than a speculative bet on near-term weather or storage draws. The structure also makes UNL a building block for multi-asset strategies that require a more stable, less-volatile proxy for the natural gas market than a front-month fund.
General information
Firm type
Asset Manager
Year founded
2009
AUM
Undisclosed
Location
Region
North America
Country
United States
City
Walnut Creek
Corporate office
Walnut Creek, CA, United States
Principals
John T. Hyland
Chief Investment Officer
Sector focus
Frequently asked questions
How does UNL differ structurally from the more famous United States Natural Gas Fund (UNG)?
UNG holds only the front-month NYMEX natural gas futures contract and rolls that entire position each month into the next nearest contract. UNL spreads its holdings across all 12 near-month contracts simultaneously, rolling roughly one-twelfth of the portfolio each month. This laddered approach significantly dilutes the impact of contango, but it also means UNL's daily moves are less volatile than UNG's, as the 12-month strip tends to move more slowly than the prompt month.
Who manages the portfolio, and is there an active investment strategy?
John T. Hyland, the longtime Chief Investment Officer for the suite of US Commodity Funds, oversees UNL's implementation. The strategy is entirely passive and rules-based: the fund maintains equal exposure to the 12 consecutive near-month contracts and rolls forward according to a predetermined schedule published in the fund's prospectus. There is no active market-timing or discretionary trading component.
Does the fund ever hold physical natural gas or invest in private energy infrastructure?
No. UNL is a pure financial futures vehicle. All assets are held in exchange-traded NYMEX natural gas futures and cleared swaps, plus short-term Treasury securities used as collateral. The fund's prospectus explicitly prohibits direct investment in physical commodities, private energy companies, or unlisted infrastructure.
In what market conditions does UNL tend to outperform front-month natural gas funds?
UNL tends to outperform during prolonged periods of contango, where future delivery months trade at a premium to the spot price. Because UNL rolls only one-twelfth of its book each month, it avoids the concentrated negative roll yield that can decimate a front-month fund. In backwardated markets, where near-term prices exceed longer-dated ones, a front-month fund would typically generate a positive roll yield and outperform UNL.
How are UNL's shares structured for investors?
UNL issues common shares that trade intraday on the NYSE Arca exchange under the ticker UNL. Authorized Participants can create or redeem large blocks of shares in exchange for baskets of the underlying futures contracts and cash, a mechanism designed to keep the market price of shares in line with the net asset value of the portfolio.
What is the regulatory status of the fund?
UNL is registered as a commodity pool with the Commodity Futures Trading Commission (CFTC) and reports its holdings and financial statements regularly to the Securities and Exchange Commission. It is sponsored by Marygold Companies (formerly Concierge Technologies), which serves as the commodity pool operator.
What is UNL's relationship to John Hyland's previous funds like the United States Oil Fund?
John Hyland was a co-founder of the United States Oil Fund (USO) in 2006, the first crude oil ETF in the US. UNL, launched a few years later, was designed within the same fund family under his continued CIO leadership. The core engineering insight — using a multi-month futures ladder — was a direct adaptation meant to fix the structural performance drag Hyland observed in the single-month contract model of the original oil and natural gas pools.
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