Daily ETF Watch: First Futures-Based Coal Fund

Commodity firm rolls out first-ever U.S.-listed futures-based coal ETF.

Reviewed by: Heather Bell
Edited by: Heather Bell


GreenHaven Commodity Services, the purveyor of the $254 million GreenHaven Continuous Commodity ETF (GCC | B-33), today launched the first futures-based coal ETF.


The GreenHaven Coal Fund (TONS), according to its prospectus, will buy a “three month strip of the nearest calendar quarter of Rotterdam coal futures contracts” traded on the platforms of the CME Group. Essentially, that means that the fund will hold futures contracts for each month of the nearest quarter, rolling its holdings four times a year.


The commodity has been struggling lately as developed markets move away from its use, but emerging markets—India and China, especially—have continued to see demand grow. A December report from the International Energy Agency projected that demand for the commodity would grow at an average rate of 2.1 percent through 2019.


And although there is an equities-based coal fund, the Market Vectors Coal ETF (KOL | C-26), it tracks companies engaged in the mining and production of coal, not the actual price of the commodity. TONS is the first fund of its kind; it comes with a management fee of 0.95 percent. That said, the total annual expense of owning the new fund comes to 1.23 percent, according to the latest prospectus. That total includes brokerage commiissions and fees of 0.30 percent minus interest income of 2 basis points.  


Direxion Plans Gold Miners ETFs
Direxion Investments put five double-exposure leveraged and inverse ETFs into registration recently. Four of the five funds will target gold miners while the fifth fund will focus on the hot China A-shares market of mainland stocks.


The two bull-and-bear pairs of gold miner funds will be tied to the NYSE Arca Gold Miners Index and the Market Vectors Junior Gold Miners Index, respectively. There are already several leveraged/inverse pairs of funds tracking these same indexes. Direxion already has triple exposure funds that are tied to both indexes, while ProShares just launched four funds that provide double exposure to the indexes. These four ProShares funds will be direct competitors to the Direxion funds in this filing if they launch.


The four proposed miners funds include the following:

·         Direxion Daily Gold Miners Bull 2X Shares

·         Direxion Daily Gold Miners Bear 2X Shares

·         Direxion Daily Junior Gold Miners Bull 2X Shares

·         Direxion Daily Junior Gold Miners Bear 2X Shares


The fifth fund in the filing, the Direxion Daily CSI 300 China A Share Bull 2X Shares, will track the CSI 300 Index. The $1 billion Deutsche X-trackers Harvest CSI 300 China A-Shares Fund (ASHR | D-38) tracks the same index.


None of the funds in the filing were assigned tickers or expense ratios; however, all five are slated to list on the NYSE Arca.

Heather Bell is a former managing editor of etf.com. She has also held editorial positions at Dow Jones Indexes and Lehman Brothers. Bell is a graduate of Dartmouth college and resides in the Denver area with her two dogs.