Business condition attached to the margin of safety
The natural gas futures curve in sustained backwardation, so that rolling contracts adds to returns instead of subtracting, with the shares at a discount to net asset value of at least 40%.
The United States Natural Gas Fund (UNG) is not an operating business. It is a commodity pool that holds near-term NYMEX natural gas futures contracts, along with cash and Treasury-type holdings that back them. It has no sales, no customers, and no earnings stream to discount. Its shares are worth what its holdings are worth, and that is its net asset value (NAV). For that reason we have not built a cash-flow valuation. The figure shown is the fund's reported net asset value per share, and all three cases carry the same number. At the end of 2025 the fund reported NAV of $12.20 per share. That is our value for all three cases. Any value above or below it would depend on a forecast of natural gas prices, and a price forecast is not something we can name and evidence from the filings. So we do not build one into any case. NAV is the amount that large holders can redeem at, and it is the anchor that keeps the shares trading near the value of the holdings. It is a snapshot at that date and moves every day with gas futures. What the filings do show is a steady loss of value from holding the fund over time. NAV per share fell from $20.36 at the end of 2023 to $16.85 at the end of 2024 and $12.20 at the end of 2025. Those are declines of 17% in 2024 and 28% in 2025, following a 64% fall in 2023. Two things contribute. Gas prices fell over these years. Also, each month the fund must sell expiring contracts and buy later-dated ones, and when later contracts cost more than nearer ones the fund loses money on each roll even if spot gas prices do not move. The fund also charges about $0.18 to $0.28 per share a year in expenses, roughly 1% to 1.5% of NAV. The fund also appears to have done a reverse split: it reported 47.8 million units after a split and 191.3 million before it, which is consistent with a 1-for-4 reverse split that raised the per-share price without adding value. A holder of this fund is therefore not earning a return from the business. The result depends on gas prices, and structural costs work against the holder. We see no evidenced driver that supports a 20% annual return, so on a value basis we assign no margin-of-safety price. The only condition under which a margin-of-safety price applies is a sustained period in which the futures curve slopes downward toward later dates, so that rolling contracts adds value instead of costing it. Even then the margin-of-safety price is a discount of at least 40% to NAV, because the value of the holdings can swing sharply in either direction. Nothing in the filing points to going-concern doubt or a near-term loss of the fund's exchange listing. We could not reconcile a NAV more recent than year-end 2025 from the filings we reviewed, so the value shown is as of December 31, 2025.