iShares Canada announced it is closing the iShares Natural Gas Commodity Index ETF (GAS) and merging it into the iShares Broad Commodity Index Fund (CBR).
The ETF GAS is merging into is a broad commodity index tracking ETF that currently has only about 7.14% allocation to natural gas futures contracts. CBR will not offer the same type of exposure to natural gas that GAS unit holders may be seeking.
Read: Is the commodity bull run over?
Natural gas has performed poorly over the last few years and GAS lost 88.91% of its value since its inception on February 5, 2009. But GAS is closing during a period where the price of natural gas could be hitting an inflection point with a growing number of positive investment factors starting to appear.
For example, the power sector continues to retire coal units, allowing natural gas to fill the gap as a base load fuel source for electricity generation. Government legislation favours natural gas burning versus coal in the power sector.