A niche ETF that we have not re-visited in some time after covering it early after its February 2012 inception is FRAK (Market Vectors Unconventional Oil & Gas, Expense Ratio 0.54%).
The ETF still remains somewhat small in terms of assets under management, with about $68.1 million currently, and it averages about 22,700 shares traded daily.
“Inducedhydraulic fracturing”, which has been nicknamed “Fracking” is the basic theme for this ETF, in that the ETF concentrates on energy companies that are involved in such activities in the course of their business.
According to fund literature, the Market Vectors Global Unconventional Oil & Gas Index tracks “the overall performance of the largest and most liquid companies involved in the exploration, development, extraction, production, and/or refining of unconventional oil and natural gas.
Furthermore, it states that “constituents must generate, or own properties that have the potential to generate, at least 50% of revenues from unconventional oil and gas”.
The following, will resonate likely with even newcomers in the “Fracking” space, “The unconventional segment is defined as: coalbed methane (CBM), coal seam gas (CSG), shale oil, shale gas, tight natural gas, tight oil, and tight sands” as this covers several different “products” of fracking that have been documented in the press over time.
This fund is heavily U.S. weighted which might be expected, with more than 73% of its underlying companies residing here, and top holdings at the moment are APC (8.74%), OXY (7.21%), EOG (6.73%), HES (5.68%), and DVN (4.88%).