Why is there a such a big difference between UGL ETF and DGP ETN?

Question

Both are gold 2X products, but the fluctuation of each product seems quite different from each other. For example, UGL is increased by about 0.02% currently, while DGP is increased by about 2%. I couldn't find any clear answer regarding this difference.

Answer 1

There's a subtle difference in their descriptions (emphasis added):

DGP is a levered ETN promising twice the daily returns of an optimized gold index—wherein gold futures contracts are chosen with an eye to beating contango.

UGL promises twice the daily returns of gold—it's a bullish bet on the spot price of gold bullion. It's designed for short-term tactical use, not for buy-and-hold investors.

So there would be differences if the gold futures curve changes shape (e.g. if the future price of gold changes more than the spot (current) price.

If you're considering investing in one or the other, note the warning on each fund:

As such, it's not intended to be held long term, but as a day-trading instrument. Its 2x exposure is not promised over periods longer than one day, as the effects of compounding can cause returns to drift from the headline 2x exposure.