Coal ETF Remains A Smart Play
The Market Vectors Coal ETF (NYSE: KOL) was one of 2009's top performing ETFs and KOL is off to a nice start in 2010 gaining about 6% in the first two trading days of the new year.
Coal miners got a lift today on news that the EPA has dropped its objections to Arch Coal (NYSE: ACI) and Patriot Coal's (NYSE: PCX) planned application for mountaintop drilling in Logan County, West Virginia.
Even if President Obama is eventually successful in limiting coal use in the U.S., KOL's international holdings give investors some buffer from the political whims of Washington. In fact, KOL is a true international ETF with four of its top 10 holdings based outside the U.S.
Don't forget steel demand. Metallurgical coal, which is produced by many of KOL's constituents, is a key ingredient in the production of steel. So if steel demand is robust this year, KOL will benefit.
KOL closed at a new 52-week high today, but with no signs of the bull run abating, investors may want to consider a small position and look to buy on any dips.
