Muddling Through The Outlook On The Coal ETF

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February 18, 2010 5:45pm ETF BASIC NEWS NYSE:KOL

confused“The Market Vectors Coal ETF (NYSE:KOL) was one of the top performing ETFs in 2009. It is home to many of the biggest U.S. coal producers and several large international players as well


. (KOL). And that top spot isn’t just in comparison to energy-related ETFs. KOL was one of the top 10 performers across all ETFs. However, that trend hasn’t carried over into 2010 as KOL is down more than 5%. In fact, until last week, KOL had been down as much 13% on a year-to-date basis,” Todd Shriber Reports From Investopedia.

Shriber continues to say, “For retail investors, the outlook for the coal sector is likely to be viewed as downright confusing at this point. One reason that KOL took such a beating earlier this month and in late January was the fourth-quarter earnings reports delivered by many coal producers were less than rosy. It should be acknowledged that most of these companies offered up decent outlooks for 2010 fueled by rising demand from China and India, yet the stocks were still punished.”
  
“Adding to the confusion, analyst reports on the sector offer little in the way of consistency. For example, on January 21, Citigroup cut its ratings on Arch Coal (NYSE:ACI), Consol Energy (NYSE:CNX), Massey Energy (NYSE:MEE) and Patriot Coal (NYSE:PCX). The next day, Goldman Sachs reiterated its ‘”attractive'” rating on the sector, but downgraded Massey while upgrading Consol and boosting the latter’s price target. Talk about confusing! It is certainly hard to get any clarity on what the near-to-medium-term outlook is for coal stocks and stock picking on an individual basis is made tougher by the conflicting analyst reports. If you can deal with the volatility, (KOL) might be your best option,” Shriber Reports.

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The investment (KOL) seeks replicate as closely as possible, before fees and expenses, the price and yield performance of the Stowe Coal index. The fund normally invests at least 80% of total assets in equity securities, which may include depositary receipts, of U.S. and foreign companies principally engaged in the coal industry. It normally invests at least 95% of total assets in securities that comprise the index. It is nondiversified.

TOP 10 HOLDINGS ( 61.51% OF TOTAL ASSETS)  
 
Company Symbol % Assets
Alpha Natural Resources Inc (ANR) 4.62
Bucyrus International, Inc. (BUCY) 4.75
China Coal Energy Co. Ltd. N/A 7.65
China Shenhua Energy Company Limited N/A 7.58
Consol Energy Inc (CNX) 8.36
Joy Global Inc. (JOYG) 7.45
Massey Energy Co. (MEE) 4.23
Peabody Energy Corp (BTU) 7.92
Walter Energy, Inc. (WLT) 4.53
Yanzhou Coal Mining Company Limited N/A 4.42

Chart for Market Vectors Coal ETF (KOL)

 

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