ETF Launch: Coal, Via Van Eck (KOL, CNX, BTU, ACI, JOYG, BUCY, TA)

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This morning we have another ETF being launched that is quite sector specific.  Van Eck Associated has listed the Market Vectors Coal ETF (NYSE: KOL).  While we have noted some ETF’s being too focused for their own good, this will allow investors to be long or short coal producers without having to guess on which individual stocks will or won’t win in a volatile sector.  The ETF is unique and quite specific to global coal company stocks.

The Coal ETF seeks to replicate the total return performance of the Stowe Coal Index. The Index provides targeted exposure to 60 companies worldwide that are engaged in the coal industry.  Estimated returns will track the sector after fees and expenses and of course is subject to the risks of investing in this sector.  The gross expense ratio is listed as 1.09% and the net expense ratio is listed as 0.65%.

If you wish to the full list of components you can see it on the Fact Sheet at Van Eck’s website.  Of the ETF’s top 10 holding, 6 of the 10 are listed in the US (with ticker and weighting percentage):

  • Consol Energy (CNX) 8.06%
  • Peabody Energy (BTU) 7.95%
  • Arch Coal (ACI) 4.69%
  • Joy Global (JOYG) 4.62%
  • Bucyrus Int’l (BUCY) 4.41%
  • Transalta (TA) 4.35%

When you include the four of the top 10 not listed above (as foreign holdings) the top 10 stocks out the approximate 60 names listed in the index account for a weighting of roughly 62.4% of the entire ETF.  This will change through time due to share price changes, rebalancings, IPO’s, and a myriad of other factors, but this was the weighting listed on the site.  The commencing price of this ETF was at $40.00.

Jon C. Ogg
January 14, 2008