Earnings analysis · 10-Q
BOIL earnings analysis
Filed August 7, 2026 · Our reading of the company's report
The latest report
BOIL’s Q2 2026 performance improved year over year, with the per-share NAV decline moderating to 13.7% from 45.7% and net loss narrowing to $24.6 million from $96.0 million. However, the Fund remained highly volatile,…
Read full summary
BOIL’s Q2 2026 performance improved year over year, with the per-share NAV decline moderating to 13.7% from 45.7% and net loss narrowing to $24.6 million from $96.0 million. However, the Fund remained highly volatile, with a 38.7% first-half per-share NAV decline and $614.8 million of natural-gas futures notional exposure. The filing provides no numeric guidance and reports no material changes to previously disclosed risk factors; the principal ongoing risks are 2x daily leverage, compounding, commodity volatility, and possible substantial loss of capital.
What stood out
-
Q2 loss moderated year over year
BOIL’s per-share NAV declined 13.7% in Q2 2026 to $27.67, materially better than the 45.7% decline to $92.69 in Q2 2025. The benchmark fell 4.9% in Q2 2026 versus 22.2% in Q2 2025.
-
Net loss narrowed substantially
Net loss improved to $24.6 million in Q2 2026 from $96.0 million in Q2 2025, primarily because the decline in Henry Hub Natural Gas was smaller in 2026.
-
First-half net income increased
For the six months ended June 30, 2026, net income was $155.3 million versus $86.3 million in the prior-year period, driven by a $136.9 million change in net unrealized appreciation compared with a $127.0 million change in unrealized depreciation in 2025.
-
Strong daily benchmark tracking
The Fund maintained a daily correlation above 0.99 to 2x of its benchmark in both Q2 2026 and Q2 2025, indicating effective daily benchmark tracking before fees and expenses.
-
Exposure remains highly geared
Natural Gas futures notional exposure was $614.8 million as of June 30, 2026, compared with $669.5 million as of June 30, 2025, while the Fund generally targets $2.00 of benchmark exposure for each $1.00 of net assets.
What to watch
-
Leveraged exposure amplified losses
The Fund’s per-share NAV fell 38.7% for the six months ended June 30, 2026, compared with a 15.5% decline in the prior-year period, showing that leverage can amplify adverse commodity moves despite the improvement in Q2.
-
Daily reset and compounding risk
The filing states that the Fund seeks 2x daily performance and does not seek to achieve its objective over periods longer than one day. Its example shows a benchmark up 10% and then down 10% producing a theoretical two-times Fund return of negative 4%, versus a benchmark return of negative 1%.
-
Large natural-gas futures exposure
As of June 30, 2026, the Fund held 19,249 long Natural Gas futures contracts expiring September 2026 with a notional amount of $614,813,060, exposing shareholders to substantial commodity-price and futures-market risk.
-
Capital-loss risk remains unchanged
The filing states there were no other material changes to the risk factors from the December 31, 2025 Form 10-K, but it also states that losses could reach all or substantially all of investors’ capital; the Fund’s Q2 2026 NAV declined 18.8%.
-
Meaningful shareholder redemptions
Shareholder redemptions reduced shares outstanding from 11,811,524 at March 31, 2026 to 11,111,144 at June 30, 2026, a 5.9% decline, which contributed to the Fund’s lower NAV.
-
Fees and trading costs increased
The Fund incurred $948,756 of management fees and $439,496 of brokerage commissions in Q2 2026, compared with $548,526 and $288,858, respectively, in Q2 2025, creating an additional drag on leveraged returns.
Management's outlook
No quantitative revenue or EPS guidance was provided. The filing states that future returns cannot be estimated by simply multiplying the benchmark return by 2x and that the Fund does not seek its objective over periods longer than one day.
This is our reading of a public filing, not the filing itself. Analysis can contain errors; check the source document for full context.