ETF Spotlight on Market Vectors Coal (NYSEARCA:KOL), part of a recurring series.
Assets: $278 million
Objective: Tracks the Stowe Coal Index, and invests in companies principally engaged in the coal industry.
How It Works
KOL holds 34 companies from around the world. Each component must have at least 50% of its revenues come from the coal industry. The United States, China, Indonesia and Australia are among the countries represented in the index. While it’s not a direct investment in the price of coal, it’s a way to access the activity in the sector.
The Latest News
- KOL was one of the top ETFs in the second quarter, gaining 68%.
- Activity in China is helping keep coal afloat and may help boost the price by increasing value-added taxes to coal producers.
- Commodities and shipping executives note China’s recent purchases of commodities that include iron, aluminum, copper, nickel, tin, zinc, crude oil, canola and soybeans. China is storing these commodities for several reasons: in anticipation of higher prices in annual contracts, for strategic reasons or to insulate domestic producers from any potential falling global prices.
- The Waxman-Markey Clean Energy Bill passed in the House this week – now it’s on its way to the Senate. The bill has a cap-and-trade system that will not produce a carbon price high enough to spur deployment of clean-coal technology for a long time.