With the rise of niche ETFs, there is seemingly an exchange-traded fund for everything. That includes an ETF for Western Canadian Select, the heavy-oil benchmark that made headlines last week when it tumbled to less than US$14 a barrel. Not surprisingly, the Canadian Crude Index ETF (CCX-T) has plummeted in tandem. Created in 2015 by Calgary-based Auspice Capital Advisors Ltd., CCX tracks an index that was “designed to provide returns that reflect the price of owning crude oil that is produced in Canada,” specifically WCS, according to company documents. The ensuing years have been a struggle. At launch, WCS traded hands at around US$50 a barrel; now, WCS is about US$20, a reflection of continuing troubles in the oil patch. The ETF has plunged about 78 per cent since inception, as of Tuesday’s close. Granted, the fund is not widely held, with total assets of around $9-million, nor widely traded, save for a recent increase in volume. But in an age of abundant ETF options for retail investors, the situation does highlight the inherent risks of niche funds with a narrow – or in this case, singular – focus. The number of Canadian-listed ETFs has exploded in recent years. […]
