ETF Chart of the Day: Coal vs. Clean Energy

July 25th at 12:06pm by Paul Weisbruch, Street One Financial

A specialized ETF that has taken a beating in 2013 in terms of performance is KOL (Market Vectors Coal, Expense Ratio 0.59%), which at the moment is the only pure play focusing on publicly traded companies that operate in the Coal industry.

KOL really started to lose some momentum this past spring in the March-April timeframe as selling accelerated, and not coincidentally during the same time, “Clean Energy” or “Alternative Energy” ETFs such as PBW (PowerShares WilderHill Clean Energy, Expense Ratio 0.60%), TAN (Guggenheim Solar, Expense Ratio 0.65%), FAN (First Trust Global Wind Energy, Expense Ratio 0.60%) and GEX (Market Vectors Global Alternative Energy, Expense Ratio 0.62%) rallied fiercely, currently trading at or near their highest levels in more than a year.

Thus, there has been a clear rotation out of old economy Coal energy (which includes production, mining, and related industries) names and into alternative forms of energy including Solar and Wind powered options for instance, at least in the past few months. [Coal ETF in the Abyss]

KOL has rebounded somewhat in the past several weeks from its lows in the $17 range, trading at $18.13 currently, but the ETF still remains below both its 50 and 200 day moving averages.

Top holdings in KOL include CNX (10.47%), China Shenhua Energy (8.20%), Aurizon Holdings Ltd. (7.43%), JOY (6.94%), and BTU (6.23%) and the ETF holds thirty three individual securities.

Trading interest has grown across this space, both Coal Energy and Alternative Energy over time (for instance FAN traded more than 1 million shares yesterday versus average daily volume of about 30,000 shares) and we suspect that more portfolio managers are looking for potential “pairs trading” opportunities in these specific ETFs dependent on what the prevailing trend is in terms of shifts toward Clean Energy/Coal Energy.

KOL debuted in 2008 and has since grown to about $159 million in assets under management while averaging approximately 134,000 shares on an average daily basis.

Market Vectors Coal

For more information on Street One ETF research and ETF trade execution/liquidity services, contact Paul Weisbruch at pweisbruch@streetonefinancial.com.

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