Market Vectors Coal ETF from Van Eck Global Will be Volatile

Market Vectors Coal ETF (KOL), an exchange-traded fund (ETF) offered by Van Eck Global, specializes in the coal industry. KOL, which was launched on January 11, 2008 at $40, holds 60 coal stocks listed on various global exchanges. The fund seeks to replicate the performance of the Stowe Coal Index (COAL).

Its major holdings are from the United States, China and Indonesia with an emphasis on the mining and production of coal. The top five holdings are: China Coal Energy (1898.HK), CONSOL Energy (CNX), Bumi Resources (BUMI.JK), Peabody Energy (BTU) and China's Shenhua Energy (1088.HK).

KOL has a low correlation with the performance of the S&P 500, making it a candidate for a diversified portfolio. But, like any commodity investment, KOL will be volatile so be prepared for large price swings.

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Posted January 27, 2008.