New Coal ETF (KOL) Introduced from Van Eck Global

From our friends who brought us the agricultural ETF MOO that I highlighted in early September [This MOO for You? An ETF to Play the Global Agricultural Boom], is a new ETF for coal.

The Coal ETF seeks to replicate, before fees and expenses, the total return performance of the Stowe Coal IndexSM. The Index provides targeted exposure to 60 companies worldwide that are engaged in the coal industry. As such, the Fund is subject to the risks of investing in this sector.

While the influx of new ETFs is turning into a tidal wave and some of them are quite useless, the people over at Van Eck are bringing out some interesting things in areas I definitely favor. Long time readers of the blog will know I turned bullish on coal (as the forgotten commodity) in September, despite knowing the coming earnings reports (at the time October earnings season) would be atrocious.... you can see some history on my views on coal through this post.

This is another interesting ETF with a very global mix, much like MOO and a nice 1 stop shop. It is very top weighted with the 5 top names making up 35% of holdings, including a familiar name from China (not available in the US) which debuted as an IPO during the height of China mania in October, went up 90% in its first day and its Chairman reported he was "Disappointed" (China Shenhua Shares Rise 90%; Chairman "Disappointed"). Ah, the height of bubbles....

Well this 'disappointment' is a 8.2% position followed by fund holdings Consol Energy (CNX) and Peabody Energy (BTU) @ 7.5% and 7.3% respectively. Further down the list are two names who deal with the mining equipment end, Joy Global (JOYG) and a name I have been considering adding to the fund multiple times Bucyrus (BUCY) @ 4.6% and 4.3% respectively. Also in this group are Arch Coal (ACI), fund holding Massey Energy (MEE) which focuses on metallurgical coal, and Yanzou Coal (YZC).

The entire index can be found here. The ETF has 60 names, but again in a strategy I find useless the bottom third of the ETF is full of names with 0.1%, 0.2%, or 0.3% exposure. Granted it's trying to replicate a coal index so there is no leeway with buying a lot of tiny positions in the ETF...

By geography the US represents 40%, Hong Kong 24%, Indonesia 11%, and Australia 9%.

Again, another quick and easy way to get exposure on a global basis to a specific sector. If you don't want to pick among individual names, I highly recommend such an offering.... of course until this fund launches ;)

Long Peabody Energy, Massey Energy, Consol Energy in fund; no personal positions