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Claymore launched a new energy ETF on Tuesday with the Claymore/SWM Canadian Energy Income Fund (ENY). This one has been in the works for a while.
It is supposed to be a blend of oil sands stocks and high yielding trusts. During a "bull phase" the fund will be 70% oil sands stocks and 30% trusts. During "bear phases" it will be the other way around. It appears as though the keepers of the fund view now as a bull phase, not that I disagree.
The fund is 100% Canadian stocks, it is heaviest in mid caps at 45% I would imagine that it is currently tilted to growth and during a bear phase it would switch to value. It only has 29 holdings.
I have written in the past that an oil sands product might be useful for people who do not want to take single stock risk within the sector. Often non-stockpickers are shut out from narrow, but potentially important, themes but not with oil sands anymore.
There is no back test data and I'm not sure there needs to be. If oil goes up how's this fund going to do? The variable is whether it does better than other products which I don't know. Hopefully it goes without saying that during the bull phase this fund will be very volatile relative to other energy funds and during the bear phase the hope is it would be less volatile but sometimes the trusts can be very hot potatoes.
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4 comments:
Having canadian energy all in one ETF is a really cool idea. It's about the only relatively safe oil left. But the bull/bear phase thing seems like an unnecessary complication.
FWIW, I have purchased the First Trust UIT Canadian Energy and Inc before.
http://www.ftportfolios.com/Retail/dp/dpsummary.aspx?fundid=4873
Once the Canadian government quits their monkey business with Canadian trusts, I may look at this stew, as it does provide a diversified narrow sector opportunity to invest in a politically safe energy location. For now, my two Canadian Alberta plays are Sunoco and Encana.
Thanks for bringing this ETF to our attention.
For those interested in American "green", take a quick look at Nova Biosource Fuels (NBF), especially if you have no place to park your accumulated road kill or other animal parts. Disclosure: I own it as a tasty speculation.
I would like to point out that Canadian "mid-caps" usually equate to some of the medium to larger sized US small caps.
Jay Walker
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