The Market Vectors Unconventional Oil & Gas ETF (NYSEArca: FRAK) rose 1.4% on Wednesday to a new all-time high on an otherwise dour day for U.S. equities.
The spark behind FRAK’s market-defying success yesterday is familiar and easy to spot. Rumors regarding a potential takeover of Anadarko Petroleum (NYSE: APC) have resurfaced. With a market value of $54.7 billion, Anadarko is the second-largest independent U.S. oil and natural gas producer.
Although Anadarko has a hefty market value and is a holding in nearly 100 ETFs, only FRAK features a noteworthy weight to the Texas-based company. Anadarko is FRAK’s largest holding at a weight of 9.2%, nearly 200 basis points more than the ETF allocates to EOG Resources (NYSE: EOG), its second-largest holding. [Increased Energy Investment Good for These ETFs]
By comparison, the Energy Select Sector SPDR (NYSEArca: XLE) allocates just 3.2% of its weight to Anadarko. XLE is the largest energy ETF and the top asset gatherer among all sector ETFs this year.
This is not the first time Anadarko has boosted FRAK. In April, following news the company announced a $5.15 billion settlement to resolve environmental cleanup claims, ending two years of litigation, FRAK surged. FRAK offers investors leverage to the growing oil boom in North America as new extraction techniques help companies produce oil from shale beds and oil sands. [Anadarko Lifts Oil Sands ETF]
However, this is not the first time the Anadarko takeover rumor has surfaced, either. The rumor has a history dating back to at least 2010 when various media outlets report Australia’s BHP Billiton (NYSE: BHP) could be a suitor for Anadarko.