This new ETF from Jefferies (NYSE: WCAT) is composed of 55 small and mid cap oil/gas exploration stocks. The weighting leans towards natural gas, with 2/3rds of the stocks’ proven reserves in that form.
From the press release:
"An investment in natural gas is an investment in the future of American energy independence," said Adam De Chiara, Co-President of Jefferies Asset Management. "The Wildcatters index provides exposure to a corner of the market to which most investors are underexposed, with minimal duplication of holdings. At the same time, the components of the index are companies that are small enough to benefit from possible changes in drilling restrictions and from expansion of natural gas infrastructure."
The expense ratio isn’t bad at .65%. It only launched yesterday, so volume is thin and the index may not be completely filled out yet. If you want to get in, it’s probably best to wait a couple weeks.
I’d rather stick to picking individual stocks, but this looks like a decent option for passive investors. Passive doesn’t mean it won’t be volatile, of course. The ETF should act like a leveraged play on the price of oil and natural gas.
Here’s a look at the top 15 holdings (you can find the full list here).