New ETFs Tap Alt Energy, Accelerated Growth

by Kyle Woodley | June 18, 2012 12:19 pm

Last week continued the exchange-traded product world’s slow stream of rollouts, with a paltry two new funds coming to market.

Sustainable Wealth Management teamed up with Exchange Traded Concepts’ ETF-In-A-Box to unleash the Sustainable North American Oil Sands ETF (NYSE:SNDS[1]), the latest play on “unconventional” energy sources. InvestorPlace’s Aaron Levitt provides a full breakdown[2], but here’s a quick look at SNDS:

Its holdings (currently at 31) must meet minimum requirements such as a $3 billion market cap, trading on a North American exchange and a 100-day average trading volume of $5 million. However, the ETF isn’t nearly as strict about the companies’ relation to oil sands.

The fund does include big names in bitumen, such as Suncor (NYSE:SU[3]), Baytex Energy (NYSE:BTE[4]) and Imperial Oil (AMEX:IMO[5]), which has a large stake in synthetic crude oil producer Syncrude Canada. However, companies such as Exxon Mobil (NYSE:XOM[6]) and PetroChina (NYSE:PTR[7]), whose oil sands projects are a tiny piece of their business, also make the cut — thus, SNDS isn’t as direct a play on North American oil sands as the name might imply.

SNDS charges 0.5% in expenses and has a scant $2 million in assets.

The other product to go live last week was the Fisher Enhanced Big Cap Growth ETN (NYSE:FBG[8]). FBG is an exchange-traded note (an important distinction you’ll want to learn about here[9]) offered by UBS (NYSE:UBS[10]) that’s meant to provide double the return of the Russell 1000 Growth Index Total Return.

This Russell 1000 index tracks companies with the fastest earnings growth. However, as is the case with all other ETNs, it doesn’t actually hold shares of the underlying companies, but is instead an unsecured debt product that merely ghosts whatever returns the issuer hopes to achieve.

However, one positive to note about FBG is its expense ratio — at just 0.13%, it’s on the extreme low end of the leveraged ETN fee spectrum.

Last week’s two launches put June’s new-product count at four. The U.S. exchange-traded market has seen 117 new funds come to market in 2012, according to XTF.com[11]. The previous week saw the birth of Top Guru Holdings Index ETF (NYSE:GURU[12]), an ETF hoping to glean the genius of the world’s best investment minds[13].

Kyle Woodley[14] is the assistant editor of InvestorPlace.com[15]. As of this writing, he did not hold a position in any of the aforementioned securities. Follow him on Twitter at @KyleWoodley[16].

Endnotes:
  1. SNDS: http://studio-5.financialcontent.com/investplace/quote?Symbol=SNDS
  2. provides a full breakdown: http://investorplace.com/2012/06/get-down-dirty-with-the-new-oil-sands-etf-snds/
  3. SU: http://studio-5.financialcontent.com/investplace/quote?Symbol=SU
  4. BTE: http://studio-5.financialcontent.com/investplace/quote?Symbol=BTE
  5. IMO: http://studio-5.financialcontent.com/investplace/quote?Symbol=IMO
  6. XOM: http://studio-5.financialcontent.com/investplace/quote?Symbol=XOM
  7. PTR: http://studio-5.financialcontent.com/investplace/quote?Symbol=PTR
  8. FBG: http://studio-5.financialcontent.com/investplace/quote?Symbol=FBG
  9. you’ll want to learn about here: http://investorplace.com/2012/06/the-troubling-evolution-of-exchange-traded-products/2/
  10. UBS: http://studio-5.financialcontent.com/investplace/quote?Symbol=UBS
  11. XTF.com: http://www.xtf.com/
  12. GURU: http://studio-5.financialcontent.com/investplace/quote?Symbol=GURU
  13. glean the genius of the world’s best investment minds: http://investorplace.com/2012/06/another-new-etf-targets-smart-money/
  14. Kyle Woodley: http://investorplace.com/author/kyle-woodley/
  15. InvestorPlace.com: http://investorplace.com/
  16. @KyleWoodley: https://twitter.com/#%21/kylewoodley

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