Thursday, January 17, 2008

New ETFs Launched

On the previous post, I showed a chart of an ETF that does twice the daily performance of the Canadian energy sector. This ETF was a Horizon Beta Pro ETF and, yesterday, this same organization introduced 4 new ETFs.

These 4 ETFs, rather than allowing you to gain exposure to Energy Stocks, allow you to gain exposure to the actual commodities. Here are the ticker symbols:

• Horizons BetaPro NYMEX® Natural Gas Bull Plus: HNU
• Horizons BetaPro NYMEX® Natural Gas Bear Plus: HND
• Horizons BetaPro NYMEX® Crude Oil Bull Plus: HOU
• Horizons BetaPro NYMEX® Crude Oil Bear Plus: HOD

According to their official website:

Similar to the existing HBP ETFs, the Bull Plus ETFs offer twice the daily performance
and the Bear Plus ETFs twice the inverse daily performance of the underlying benchmark. All
four new HBP ETFs will trade in Canadian dollars and, through currency hedging, will offer
investors exposure to commodity returns expressed in US dollars.

The fact that these ETFs have double exposure makes them more attractive than the current Oil ETF, USO, in my opinion. Furthermore, the fact that these ETFs offer currency hedging will make their analysis much easier, as there is one less variable that needs to be factored in.

In addition, there are plans for even more Horizon ETFs. These are expected to come out next month, and here are the descriptions:

• Horizons BetaPro COMEX® Gold Bullion Bull Plus HBU
• Horizons BetaPro COMEX® Gold Bullion Bear Plus HBD
• Horizons BetaPro S&P/TSX Global Mining® Bull Plus HMU
• Horizons BetaPro S&P/TSX Global Mining® Bear Plus HMD
• Horizons BetaPro DJ-AIGSM Agricultural Grains Bull Plus HAD

The introduction of the first two ETFs above is something I am particularly interested in. This will now mean that Canadians can trade gold directly without having to convert their money into US Dollars, (which I never liked doing) or getting into the futures market.

As soon as there is enough data to perform technical analysis of these ETFs, I will begin analyzing their charts.

Anyway, here is a quick chart of the TSX. Looks like I was wrong about the direction of the breakout:


GI said...

Very interesting post regarding the new ETF's. I have been considering switching out of my old precious metals fund into an ETF for some time now. Someday I'll have to get down to making a real close study of which looks best.

Danny Merkel said...

Hi GI,

Thanks for the comment. ETFs might be a better bet due to the lower MERs. However, with most mutual funds, you can buy and sell them without fees, so its a trade off, I guess.

With the new ETFs, it will be interesting to trade the actual metal rather than the stocks. The metal is a whole different ball game, as you know.

GI said...

Inside my self directed RSP at RBC they've reduced the MER to 1% and no switching fees. They are probably trying to avoid people leaving their mutual funds for ETFs and in my case so far its worked although I've never bothered yet to make the real numbers comparison.

bsimpson said...

Hello Danny:

Re the Horizon Beta Pro ETFs, you talked about a bull and a bear gold bullion ETF due out next month. I know that there are 2 gold-related ETFs by Horizon Beta Pro introduced on the TSX on June 26, 2007. They are: HGU (HBP S&P/TSX Global Gold Bull Plus) and HGD (HBP S&P/TSX Global Gold Bear Plus)

The stock symbols on the ones you mentioned appear to be HBU and HBD. Now I'm wondering if those are one and the same as the ones I mentioned, or are they somehow different?

Also, and as a point of interest for those who might be interested in buying any of the ETFs you mentioned, the "U" and "D" in the ticker symbols stand for Up or Down.