Fundztrader is Closing Down

Unfortunately the team behind Fundztrader has stepped down and will no longer continue publishing new information.

There will be no new ratings posted, effective immediately!

We will leave the website up so that visitors have some warning time, but it will be taken down permanently some time in the future. When that date is determined, we'll update this message.

A Coal ETF - A New Commodity Based ETF in Energy

We have previously taken a look at a handful of commodity based ETFs as a way to diversify your investing portfolio. One of the problems with commodity based ETF’s to this point has been that the choices aren’t really representative of the wide range markets represented by the commodity markets. But that is changing over time, for example a new coal based ETF recently caught our eye.

There have been energy plays in the ETF market like IYE, and there have been a couple of energy related commodity ETF’s like some of the oil based ETF’s. But a pure play in coal is a narrower niche, with a little more volatility, but we would hope that its not quite as volatile as oil has shown itself to be quite sensitive to world events, specifically in the Middle East. Coal on the other hand is largely drawn from domestic sources, so it may be somewhat easier to trend. Of course the ticker symbol is KOL, this ETF which is offered by Van Eck started trading on 1/14/08. It tracks the Stowe Coal Index, which includes 60 coal production and transportation companies from 12 countries. The top holdings include China Coal Energy (Hong Kong), Consol Energy (NYSE), Bumi Resources (Indonesia), Peabody Energy (NYSE), and China Shenhua Energy Corp (China).

Coal produces about 25% of the world’s energy needs, so it is not just a domestic play. In fact China is the biggest consumer of coal, getting about 75% of its energy from coal. Many Eastern European countries get much of their energy from it as well. And of course, of all the carbon based fuels, it is generally thought to be one of the dirtier fuels, although there is a lot of new technology coal to gas to help address that.

Filed under ETF News

Comments on A Coal ETF - A New Commodity Based ETF in Energy »

May 2, 2008

Leroy Harris @ 5:39 am

I’m looking for coal mutal funds to invest in. where should I look.

Leave a Comment