The securities and investment fraud law firm Fitapelli Kurta is interested in hearing from investors who have complaints regarding the iPath Bloomberg Natural Gas Subindex Total Return exchange-traded note (GAZ).
The iPath Bloomberg Natural Subindex Total Return ETN, according to ETF.com, is an exchange-traded note issued by Barclays that tracks “an index of front-month futures on natural gas, which is the exact same exposure provided by our benchmark. But GAZ is closed to creations, meaning the key plumbing that underpins all exchange-traded products—the create/redeem process—is broken. This situation isn’t new: GAZ has been closed for creations since 2009, and has traded at massive distortions to fair value at times. In short, proceed with extreme caution.”
According to the iPath Bloomberg Natural Subindex Total Return ETN’s prospectus, there are a number of potential risks associated with an investment in GAZ. As with many similar investments, there is the possibility that even if the ETN on redemption exceeds its initial value, you will receive less than your principal investment. Additionally, ETNs often track underlying commodities that are “particularly concentrated,” which may be volatile. Commodity prices “may change unpredictably,” meaning the value of your investment might change in unforeseeable ways. Political developments in a foreign country where the industry is concentrated, for instance, may drastically affect your investment’s value. The underlying indices may also include contracts that in the future are no longer regulated. Consider this passage for a clearer picture of the factors affecting your investment’s value:
“Trading in futures contracts on physical commodities, including trading in the index components, is speculative and can be extremely volatile. Market prices of the index components may fluctuate rapidly based on numerous factors, including: changes in supply and demand relationships (whether actual, perceived, anticipated, unanticipated or unrealized); weather; agriculture; trade; fiscal, monetary and exchange control programs; domestic and foreign political and economic events and policies; disease; pestilence; technological developments; changes in interest rates, whether through governmental action or market movements; and monetary and other governmental policies, action and inaction.”
The prospectus also notes that Barclays may engage in “business activities that create conflicts of interest.” That is, the product’s issuer may conduct trading activities that influence, perhaps adversely, the interests of investors in GAZ. Additionally, Barclays notes that the tax consequences of an investment in GAZ are “unclear,” and “the Internal Revenue Service could assert that any series of ETNs should be taxed in a manner that is different than described” to the investor.
In other words, the iPath Bloomberg Natural Subindex Total Return ETN is a complex investment which may not be suitable for all investors, especially novice investors. Prospective investors should seek a thorough explanation of the product from their broker or investment adviser before making an investment. If your broker or investment adviser fails to adequately explain the risks associated with the iPath Bloomberg Natural Subindex Total Return ETN, he or she may be subject to disciplinary action by FINRA or the Securities and Exchange Commission.
If you have lost money investing in the iPath Bloomberg Natural Subindex Total Return ETN (GAZ), you may be able to recover your losses. Call the securities and investment fraud law firm Fitapelli Kurta at 877-238-4175 for a free consultation. All cases are taken on a contingency basis: Fitapelli Kurta only gets paid if and when you collect funds. Time to file your claim may be limited, so we encourage you to avoid delay. Call 877-238-4175 now to speak to an attorney for free.