Coal ETF is not a bad investment and an investor can procure a handsome amount out of it. Investors can invest fruitfully in alternative energy sources which are now getting popularity in financial markets. This is happening due to the increasing prices and value of oil and gas. Coal ETF might be an excellent alternative investment source when invested properly.
Coal ETF has attracted lots of investor with its recent inclusion of Waxman-Markley Energy Bill. This bill supports the use of clean energy resources like clean coal. Throughout the global different countries are suffering from energy crisis and they are shifting towards clean energy resources like coal. This is the indication that coal ETF can be used as long-term investment plan for any investors.
Coal as a commodity is expected to grow with steady and secure progress. Already it has shows its positive sign to emerge as a important energy source and financial market commodity. If an investor wants to maintain stability in his or her investment portfolio then he or she should definitely invest through coal ETF.
There is a positive international impact of coal which has brought it as an economic unit. Countries across the globe is realizing that to make our plant more environment friendly, alternative resources like coal would need to be available. There is high demand for coal in two Asian giants, that is, India and China.
Coal ETF can be used to get an exposure to international or to foreign financial platform. Coal ETF would not only give a global economic exposure, but also it would hedge some foreign risk that already practiced by investors in share markets. For example, if a country is an emerging economy and its main product for export is coal then investors through coal ETF can access this country and can hedge their foreign risk for that particular country’s market also.
There are so many advantages to invest in a coal ETF. Firstly, as an ETF it can give tax benefits to investors. Furthermore, a coal ETF can be used to hedge risk. Whatever the risk is, that is downwards and upwards, coal as energy would hedge any kind of foreign risk through a coal ETF.
Again, coal ETF can be used to diversify a portfolio investment and can lower investors risk with that portfolio. Investors would get low risk and high value through a coal ETF. Also a coal ETF can provide exposure to an alternative energy source (global energy source) or to entire coal sector.
Talking about disadvantages of coal ETF it can be said that like other financial assets in a share market, coal ETF is also not loss-proof. But, it depends upon the investors also. If an investor examines and researches market regularly and invests his or her capital after proper scrutiny and also takes experts’ help then those losses can not damage his or her investment portfolio.
There are two coal ETFs which are now very popular. One of them is Market Vectors Coal ETF (KOL) and other one is PowerShares Global Coal ETF (PKOL). Investors can procure full advantages from these two coal ETFs. But, it is smart to watch some movements of some major coal ETFs first. After doing an analysis on market conditions, if investors join in a coal ETF then it would be excellent for him or her.
Market Vectors Coal ETF (KOL) tracks Stowe Coal index with performances of stocks and movement of financial assets related to coal. KOL exclusively comprise Unites States and some other foreign companies which are focused in coal industry only. Some names of Market Vectors Coal ETF are Massey Energy (MEE), Peabody Energy (ETU), Bucyrus International (BUCY), Cons Energy (CNX), Walter Energy (ETU) and Joy Global (JOYG).
On the other hand, investors can also look for PowerShares Global Coal ETF (PKOL). Investors can include PKOL in their investment portfolio as a coal ETF which tracks the performance of the NASDAQ OMX Global Coal Index. Most important thing with PKOL is that this coal ETF is only and exclusively engaged in coal industry. That is the reason that they are terms as the most liquid and active global companies delivering coal ETF. Investors would definitely get benefits from this coal ETF.