Oil Sands ETFs: Alternative Energy Investments | ETF Trends

In response to the world’s demand for energy, the oil and gas industry has begun expanding into oil sands reserves. Exchange traded fund providers have taken notice of the new oil boom and now offer a couple of fund products that provide exposure to this nascent industry.

The energy industry is moving toward hydraulic fracturing, or “fracking,” and shale gas production. North America is home to the largest oil sand reserves in the world, with Canada accounting for an estimated 170 billion barrels, or 70% of global deposits.

“The Canadian oil sands represent the majority of proven oil reserves outside of OPEC nations; the sands are the top supplier of crude oil to the U.S. and are rapidly expanding production capacity over the next decade. Companies invested in the development of Canada’s oil sands stand to be key beneficiaries of these trends,” Derek Gates, CFA, founder of Sustainable Wealth Management, said in the press release.

Investors interested in gaining exposure to the growing sub-sector may take a look at the following ETFs:

The Guggenheim Canadian Energy Income Fund (NYSEArca: ENY) tries to reflect the performance of the Sustainable Canadian Energy Income Index, which invests in oil and gas producers in the royalty trusts and oil sands resources categories. The Index includes 200 TSX listed oil and gas sector securities and about 25 oil sands resource producers, so this is not a pure oil sands play. The fund has a 0.65% expense ratio

ENY only holds 32 components sampled from the Index. Top holdings include Imperial Oil 7.83%, Suncor Energy 7.5%, Canadian Oil Sands 7.0%, Cenovus Energy 6.4% and Southern Pacific Resource 6.2%.