Auspice Capital launches ETF tracking Canadian natural gas

Oct 27th, 2016 | By | Category: Commodities

Canada-based alternative investment manager Auspice Capital Advisors has launched the Canadian Natural Gas Index ETF (Toronto: GAS), the first ETF to allow investors to gain exposure to the price of Canadian natural gas.

Auspice Capital Advisors launches first ETF tied to Canadian natural gas

Tim Pickering, founder and CIO of Auspice Capital Advisors.

The fund tracks the firm’s newly created Canadian Natural Gas Index, reflecting the returns that an investor would expect to see when holding and rolling US dollar-denominated 3-month futures contracts tied to Canadian natural gas. By tracking 3-month futures contracts, compared to front-month futures contracts, transaction costs, as well as potentially the impact of negative roll yields, are reduced.

Tim Pickering, founder and CIO of Auspice Capital Advisors, commented: “Canadian natural gas is critically important to the North American marketplace. Representing approximately 20% of the continent’s total production, Canada is the largest foreign supplier of natural gas to the US – the world’s largest market participant. As such, it is important for investors to be able to accurately track and capitalize on the commodity’s performance.”

Until the ETF’s launch, there has been no other “pure play” for investors outside the wholesale marketplace.

“Natural gas is a valuable commodity used across residential, commercial, and industrial settings,” added Pickering. “By allowing for a more accurate, transparent price tracking method, we hope to raise awareness of Canada’s dominance within the global natural gas marketplace, enhancing transparency and participation in this important commodity.”

As of 27 October 2016 the fund’s index is down 32.7% and 62.8% over one and three year time periods respectively, reflecting the bearish trend across most commodities in recent years. The commodity has recovered this year however with the index posting a gain of 20.5% over the past six months.

Figure 1: Canadian Natural Gas Index performance between January 2011 – October 2016.


Source: Auspice Capital Advisors.

The ETF has a total expense ratio of 0.65%.

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