What are oil sands? Where are they located?
Oil sands are a form of natural crude oil that is combined with sands, clay and water. Oil sands are located throughout the world but the largest known concentration is located in northern Alberta, a province of Canada.
What is the Sustainable North American Oil Sands ETF (SNDS)?
The Sustainable North American Oil Sands ETF (SNDS on NYSE Arca) is the first US-listed ETF dedicated to investing in the largest source of crude oil outside of OPEC nations, Canada’s Oil Sands. The fund invests in companies that cover all aspects of extracting Canada’s Oil Sands and getting them to market. The companies in the fund are large cap and highly liquid and include companies based in Asia, Canada, Europe and America.
Can you describe the underlying index and the methodology?
The fund is based on the Sustainable North American Oil Sands Index® developed by Sustainable Wealth Management, Ltd., a Calgary, Alberta-based index provider responsible for the original benchmark Sustainable Oil Sands Sector Index® (SOSSI Bloomberg).
The objective of the index is to capture the growth of Canada’s oil sands sector by investing in the most liquid energy-related companies from around the world that have operations (equipment, services, facilities, production and/or pipelines) in the region.
Canadian- and U.S.-listed stocks are eligible for the Sustainable North American Oil Sands Index®. The number of constituents is expected to range between 25 and 40 depending on the depth of the market. There will be 31 constituents in the index when SNDS is launched. The constituents are equal weighted and rebalanced quarterly. As of May 25, 2012 the index has a 3.07% dividend yield, 15.7 average price to earnings ratio, $50.4 Billion average market capitalization and $162,300,000+ average daily value of shares traded per constituent (using the last 100 days of volume).
Why invest in SNDS?
Canada’s oil sands represent the largest source of crude oil reserves that can be privately owned (as opposed to OPEC countries where national oil companies own and control the oil). The oil is located close to existing infrastructure that is connected to the US. SNDS may be considered a means to invest in those companies that stand to benefit most from the United States’ effort to move a significant portion of their energy dependence to North American resources. Canada follows common law, supports private property rights and is actively promoting the development of the oil sands. According to a recent quality of life survey, (Center for the Study of Living Standards, May 18, 2012, see Human Development by Province; Study Ranks Quality of Life across Canada, http://www.HuffingtonPost.ca) Canada is one of the safest, most stable economies in the world. Canada could be a direct beneficiary of instability in other oil producing regions and rising global energy demand. (Source www.iea.org for rising demand and discussion of instability in oil producing regions, WEO 2011).
How often will you rebalance SNDS?
The fund is rebalanced every quarter to match the changes in the underlying index. Mergers and acquisitions, spinoffs and large cash dividends might result in additional rebalances in between each quarter.
What are the fees associated with SNDS?
The management expense for the fund is 0.50%, below the sector average and similar to the largest energy sector ETFs with an international focus. (Energy Equities category average fee is 0.52% with 29 ETFs, fees ranging from 0.18% to 0.85% Source: www.etfdb.com/etfdb-category/energy-equities/)
Who should consider investing in SNDS?
SNDS is designed to give investors who want global energy sector exposure with visible growth prospects and an above average investment yield. It gives direct access to the fast growing oil sands sector and is diversified by energy subsectors and companies are based in several key geographic regions such as Asia, Europe and North America.
What is unique about the SNDS approach?
This fund tracks an index that is equally weighted to provide less concentrated exposure to the largest companies and more meaningful exposure to companies with outstanding growth prospects. According to the Alberta government, there is $200 Billion+ in planned investment in the sector over the next ten years. The majority of energy-sector ETFs are invested on a market cap basis. This means that much of the assets are concentrated in just 5 to 10 companies that have extremely large market capitalization (Source: www.etfdb.com/etfdb-category/energy-equities/)
How do I invest in SNDS?
Investing in SNDS is as simple as placing an order in your brokerage account for SNDS on the NYSE Arca exchange.
What is Sustainable Wealth Management?
Sustainable Wealth Management Ltd is a Calgary-based index provider founded by Derek Gates, CFA, the creator of the world’s first Canadian oil sands index. The company provides index information to numerous ETF providers in Canada, Europe and the US. SNDS is SWM’s second US listed ETF following the Guggenheim Canadian Energy Income ETF (ENY – NYSE Arca).
Where can I find more information about Sustainable Wealth Management?
Who are your strategic partners?
Index Provider: Sustainable Wealth Management Ltd
Custodian: Brown Brothers Harriman