While there’s a number of spot plays to invest in the shale and fracking boom, other exchange-traded funds can get you exposure to the phenomenon, too:
The new Market Vectors Unconventional Oil & Gas ETF (NYSE:FRAK) allows investors to directly tap into the growth of these unconventional and alternative sources of energy. Aside from the ETF’s oil-sands/bitumen holdings, shale and coal-bed methane make up the bulk of the portfolio. While not as familiar to many investors, coal-bed methane refers to natural gas that has been absorbed into coal and is extracted much the same way as shale gas — i.e. through hydraulic fracking. The fund’s holdings are spread across 43 firms that derive more than 50% of their revenues from the previously defined unconventional sources of oil and gas. This includes top weightings to Devon Energy (NYSE:DVN) and Occidental Petroleum (NYSE:OXY).
Also featuring a broad energy mandate that is benefiting from the shale boom is the iShares Dow Jones US Energy ETF (NYSE:IYE). That fund tracks 91 different E&P firms and provides access to the valuable oil services sector. The U.S. focus assures that many of the firms in the portfolio — including 11 on this list — have some exposure to the fracking revolution. In addition, the fund trades more frequently and is cheaper than FRAK.
As of this writing, Aaron Levitt did not hold a position in any of the aforementioned securities.