Top ETF Buy for your TFSA and RRSP

The Claymore Natural Gas Commodity ETF (TSX:GAS), has been designed to track the performance of the benchmark NGX Canadian Natural Gas Index, less fees and expenses. The ETF will provide non-leveraged exposure to the Alberta natural gas market, by investing in physical natural gas forward contracts. The ETF will not use leverage and targets a 1:1 relationship between assets and natural gas exposure. In addition, the ETF will provide this exposure without being directly involved in the exploration, operation, reserves, engineering and management risks associated with an investment in entities that explore for, produce and sell natural gas. This ETF is one of our top picks as it effectively tracks natural gas prices. In January 2012, NYMEX natural gas hit a 10 year low at $2.30/mcf and therefore we strongly feel natural gas has reached its bottom. Although we feel it is unlikely natural gas will see even $7/mcf in the short term, if you look at historical natural gas charts, you will see that every year for the past 10 years, that natural gas prices to rise to the $4/mcf level. This would result in an approximate 40% return on your investment in this particular Natural Gas Commodity ETF. Natural gas prices directly correlate to supply and demand of the natural gas market and with Chesapeake Energy Corporation, the world's second largest natural gas producer, shutting in production, we forsee other North American natural gas producers doing the same which will help reduce the current over supply of natural gas and we feel you will see the price of natural gas recover in the fall of 2012 which will result in the Claymore Natural Gas Commodity ETF generating significant returns in 2012 and into 2013. The key here is if natural gas goes above $3/mcf, we will no longer recommend buying the Commodity ETF , GAS as with all the large North American Shale place we feel natural gas will continue to fluctuate between $2.50/mcf and $4.25/mcf and we will continue to recommend buying the Claymore Natural Gas Commodity ETF when natural gas prices are in the $2.50/mcf range.

 

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