If You Had Invested $10,000 in KOLD Stock in February 2019, What Would Its Value Be Today?

Back in February 2019, the price of one share of the ProShares UltraShort Bloomberg Natural Gas ETF (ticker: KOLD) closed at $422. Fast forward to January 2024, and KOLD stock closed at $102.41 per share on January 26th, 2024. So what if you had invested $10,000 into KOLD back in early 2019? What would that initial investment be worth today after 5 years? Let’s take a look.

In February 2019 when KOLD stock was trading at around $422 per share, $10,000 could have purchased approximately 23 shares (about $9,706 divided by $422 per share).

As of January 26, 2024 with the price at $102.41, those same 23 shares would now be worth $2,355 – a severe drop of over 76% from the original investment value.

Why such a drastic decrease? KOLD stock is an inverse ETF designed to deliver the opposite returns of natural gas futures contracts. It uses short-selling and other strategies to benefit from natural gas prices declining.

Back in early 2019, natural gas prices were quite high – hence KOLD stock trading at around $422 per share. However, over the subsequent 5 years natural gas prices would plunge dramatically, causing the value of KOLD stock to sink as its inverse strategies backfired.

In summary, while KOLD delivered strong returns during 2018 and early 2019 when natural gas prices were elevated, the ensuing years of declining natural gas prices have severely hurt investors in this ultrashort ETF.

Someone who invested $10,000 into KOLD in February 2019 would see their investment dwindle to just $2,355 as of January 2024. This translates to a 76.5% loss over the 5 year period, demonstrating the risks of using highly speculative inverse and leveraged ETFs over long periods of time.

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The relentless contango headwinds in natural gas futures markets would have generated consistent decay in KOLD’s value.

So while trading vehicles like KOLD can produce sizeable short-term gains when markets move in their favor, holding them long-term can generate drastic losses as underlying price trends shift.

The $7,645 loss from this hypothetical $10,000 KOLD investment is a testament to the risks of long-term bets against commodity prices.