Jefferies Launches New Energy ‘Wildcatters’ ETF
January 20th 2010 at 6:00am by Tom Lydon
Just in time for rebound in natural gas prices, Jefferies has launched the highly anticipated Jefferies | TR/J CRB Wildcatters Exploration & Production (NYSEArca: WCAT) exchange traded fund (ETF).
WCAT is an equity ETF that holds small- and mid-cap oil and gas exploration and production companies and tracks the Thomson Reuters/Jefferies CRB Wildcatters Energy E&P Equity Index.
Owning such a fund offers a variety of benefits, including:
- Equity-based commodity ETFs don’t have the same implications as ETFs that hold physical assets or futures, particularly when it comes to taxes. [ETFs and taxes.]
- Equity-based commodity ETFs also tend to not be as volatile as futures funds – when a commodity’s price declines, the effects aren’t immediately felt. [It's what makes up your ETF that counts.]
- Small-cap energy stocks are challenging to research and tend to be riskier; owning such an ETF gives investors exposure to a range of natural gas and oil companies without having to do additional research or legwork on individual components. [A comeback for natural gas and oil?]
- Small-caps tend to outperform large-caps in economic recoveries, thanks to their ability to adapt.
- Small-cap energy ETFs can help you diversify, since many energy equity ETFs hold larger companies. [Natural gas in the spotlight.]
“An investment in natural gas is an investment in the future of American energy independence,” said Adam De Chiara, Co-President of Jefferies Asset Management.
For more stories about natural gas, visit our natural gas category.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.