GreenHaven is planning its second commodities related exchange traded fund, this time providing retail investors with an easy way to access coal price movements.
According to a Securities and Exchange Commission filing, the GreenHaven Coal Index Fund will try to reflect the performance of the Tradition Coal index, which follows the settlement prices of a continuous three months strip based on the second-to-expire, third-to-expire and fourth-to-expire CME Central Appalachian coal futures contracts.
The Fund will hold CAPP coal futures traded on the CME, Intercontinental Exchange or other U.S. foreign exchanges to achieve its stated strategy. Additionally, the fund may use forward contracts, cleared swap contracts and over-the-counter swaps.
Global coal prices are currently trading down about 20% to 30% year-over-year, The Economic Times reports.
“Major reasons for this decline include China’s economic slowdown and high coal inventory levels, increased production and exports from Indonesia and Australia, and increased exports by US coal producers due to cheap natural gas displacing coal used in US power generation,” according to a Fitch report.