Did UNG's managers blink in the face of investor unrest? Now, should investors bite as the U.S. Natural Gas Fund’s skippers dangle the carrot of opening the ETF’s coffers for business again?

The premium for UNG was once trading around 16 percent, as noted in Friday’s report about the natural gas ETF making plans to re-open to new investors on Sept. 28. Now, it’s trading at a much easier-to-swallow premium.

But isn’t it a common rule of thumb with closed-end funds to invest only when you can buy at a discount?

While not saying it in so many words, the firm that runs UNG is reserving the right to change its mind again as circumstances dictate. Managers at United States Commodity Funds LLC are clearly wary of ongoing political debate and potential regulatory crackdowns.

From a management perspective, that only makes sense. But from an investment viewpoint, it also seems fairly logical to approach UNG at this point with a rather detached frame of mind. Besides the mechanics of how a newly opened ETF will trade and what regulators might do, fundamentals in the natural gas market continue to evolve. After all, we’re moving into the winter months when demand seemingly will expand and supply levels will come under even closer scrutiny.

It’s certainly interesting to note that many investors still seem convinced that natural gas is heavily undervalued by the market. As we note in our breakdown of the latest data of individual fund and ETF category flows today, (“Are Investors Really Running From Leveraged ETFs?”) UNG still had some $4.6 billion in assets at the end of August. At that level, the fund was holding steady at record rates maintained over the past three months.

So it’s likely UNG, at least in some form, will be a force to consider when investors talk about natural gas markets. (The news article about UNG's planned opening notes that some analysts have estimated as much as a third of all natural gas futures trading involves the ETF.)

But another consideration is how UNG’s plight fits into the whole regulatory cloud hanging over commodity pool ETFs, as well as leveraged funds. After our review of not only asset flows but also net inflows in both categories, it’s still not clear a mad rush to the sidelines is taking place.

For traders convinced that such ETFs are about to enter some sort of permanent regulatory purgatory, news of UNG’s reopening seemingly offers at least a ray of optimism.

As headlines were blaring last week of investors dumping their commodity, leveraged and inverse ETFs, digging a bit deeper below the surface raises real questions. How panicked have traders really become about these funds? And how much of their concern is based on market trends involving volatility and fundamentals as opposed to potential regulatory action?