Guggenheim Canadian Energy Income ETF (ENY) — This exchange-traded fund seeks to track an index of approximately 44 high-yielding Canadian securities in the energy sector, which have a forward annual dividend yield of at least 1.5%. The current distribution yield of EYN is 3.67%.
The ETF is listed on the New York Stock Exchange, but because its holdings are based outside the United States, they may be subject to different taxes and/or penalties. However, because it is an income fund, many of its holdings are generally of a higher quality and may be able to better cover payouts.
T. Boone Pickens appeared on CNBC Tuesday, saying he expected Brent crude oil to be back up at $90 to $100 a barrel in 12 to 18 months. Brent crude rose around $2 to $62 a barrel, while West Texas Intermediate (WTI) light sweet crude gained $1.86, or 3.4%, to $57.12.
Last week, Spain’s Repsol SA ADR (REPYY) made an $8.3 billion bid for Calgary-based Talisman Energy Inc. USA (TLM), the second largest holding in ENY. This is considered to be a sign of further consolidation in the industry.
In the Dec. 22
Trade of the Day, I recommended another of the fund’s top holdings, integrated oil and gas company Suncor Energy Inc. USA (SU). I noted that MBF Clearing Corp. Chairman Mark Fisher said Canadian oil companies offer the best value in this depressed sector.
The weekly chart for ENY shows recent high-volume buying and a new buy signal from my proprietary internal indicator, the Collins-Bollinger Reversal (CBR).
Investors should be aware that ENY is a speculative long-term investment. However, it may be purchased as an intermediate-term trade with an objective of $15, its 50-day moving average and more than 25% above current prices.
