Van Eck Debuts Unconventional Oil & Gas ETF
Under The HoodThe new ETF will consist of companies that have the potential to generate at least 50% of their revenues from unconventional oil and gas. The underlying Market Vectors index consists of about 43 individual components, with U.S. companies (71%) and Canadian stocks (29%) representing the vast majority of the portfolio. FRAK has a tilt towards large cap companies, as about 84% of the underlying index consists of stocks with a market capitalization of $5 billion or more. The largest individual weightings include:
Canadian Natural Resources (8.6%) Occidental Petroleum (8.4%) EOG Resources Inc. (7.2%)Though there is some overlap between the components of FRAK and other more conventional energy ETFs, this fund will generally offer exposure that is different from the other products in the Energy Equities ETFdb Category . Perhaps the closest competitor will be the Guggenheim Canadian Energy Income ETF ( ENY ). That fund is linked to an index that includes Canadian oil sands producers, shifting exposures based on trends in crude oil prices [see Reviewing The Forgotten Oil ETFs ].
Unconventional Oil & Gas 101The case for new ways to generate oil and gas is a relatively easy one to make; supply of these resources is finite, and rapidly-expanding emerging markets have dramatically increased their need for fossil fuels in recent years. That creates an opportunity for firms able to access oil and gas deposits and extract these resources from once inaccessible locations.
In general, unconventional oil and gas methods refer to new techniques used to find, extract, and produce energy commodities. It’s important to note that these techniques are often applied to known or existing sources of oil and gas, allowing companies to squeeze additional output from known supplies. In many cases, unconventional approaches are allowing firms to extract hydrocarbons from locations that had previously been discovered but that had been impossible to “unlock.
Oil Sands Etf - News
The new Market Vectors Unconventional Oil & Gas ETF (FRAK) will seek to replicate an index comprised of companies operating in segments such as coalbed methane, coal seam gas, shale oil and gas, and oil sands. The new ETF will consist of companies that
This proposed ETF which just hit the wires in a recent SEC filing, looks to be called the Sustainable North American Oil Sands ETF and trade under the ticker symbol SNDS, assuming of course it can pass the regulatory hurdles first.
Although energy-related ETFs abound, Market Vectors Unconventional Oil & Gas ETF has a unique mandate. The term "unconventional" refers in part to methods of exploration and extraction and as such includes oil sands, oil shales, tight sand,
Part of the increasing number of ETFs with northern exposure comes from soaring production of unconventional energy resources, such as the oil sands of Western Canada. Depending on the estimate, that region is believed to be home to the second- or
Other so-called unconventional extraction methods targeted by the fund include coal seam gas, coal bed methane and even oilsands. The fund has 44 constituent holdings but some of the largest names are more like large diversified energy companies with
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