WisdomTree has launched a European natural gas ETC product, available on the London Stock Exchange.
The fund is also available on the Borsa Italiana and Börse Xetra exchanges and comes with a 0.49% management expense ratio.
WisdomTree European Natural Gas ETC seeks to track the performance of the BNP Paribas Rolling Futures W0 TZ Index, which is designed to pride exposure to gas traded on the Dutch Title Transfer Facility — the benchmark for European gas prices.
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Nitesh Shah, head of commodities & macroeconomic research, Europe, at WisdomTree, said: “The Russia-Ukraine war that started in 2022 profoundly changed the natural gas markets of Europe. Pipeline flows of natural gas from Russia to Western Europe, which used to be the main source of natural gas for the region, are now negligible.
“Western Europe is far more reliant on Norwegian pipeline flows and global liquified natural gas imports. As the European Union navigates an energy transition, it will still be reliant on natural gas. With that in mind, there will be periodic sharp increases in European natural gas prices as the fuel is used to make up shortfalls in renewables.
“The Dutch Title Transfer Facility is the most representative and liquid natural gas benchmark in Europe and thus the best tool for tactical exposure to these price jumps and for hedging purposes.”
