In North America, there is a burgeoning new industry of oil extractors and producers tackling oil sand field reserves that could rival that of the Middle East. As a response to the growing sector, new exchange traded fund provider, Sustainable Wealth Management, has launched Tuesday the first pure ETF play that focuses on the North American oil sand industry.
Sustainable North American Oil Sands ETF (NYSEArca: SNDS) will try to reflect the performance of the Sustainable North American Oil Sands Index, which is comprised of Canadian- or U.S.-listed companies that explore, produce, refine, market, store, transport or provide services related to oil sands.
SNDS will hold between 25 and 40 component stocks and follow an equal-weight methodology. Holdings will be rebalanced quarterly. According to the prospectus, the fund has an expense ratio of 0.50%.
As of May 31, the underlying index had a 3.15% dividend yield. The ETF will issue dividend payments quarterly. Distributions are taxable as ordinary income or capital gains, unless invested through a tax-deferred arrangement, like a 401(k).
According to the press release, SNDS will provide exposure to energy companies positioned to capitalize on the largest known oil reserve outside of OPEC.
“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. “SNDS is designed to give investors global energy sector exposure with growth prospects and potential for an above average investment yield.”
For more information on new fund products, visit our new ETFs category.
Max Chen contributed to this article.