Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Gold/Mining/Energy : Big Dog's Boom Boom Room -- Ignore unavailable to you. Want to Upgrade?

To: George8 who wrote (98825)	4/8/2008 8:37:47 AM
From: Ed Ajootian	Respond to of 206291

George8, BSR looks interesting. Note that it only includes midstream enterprises. 2 E&P ETF's that I have stumbled upon in recent months are FCG and IEO. The first one came from my buddy at Morgan Stanley. FCG -- "The investment seeks to replicate, net of expenses, the ISE-REVERE Natural Gas Index. The fund will invest at least 90% of assets in securities that comprise the index. The index is an equal-weighted index that consists of exchange-listed companies that derive a substantial portion of their revenue from the exploration and production of natural gas. The fund is nondiversified." IEO -- "The investment seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the Dow Jones U.S. Select Oil Exploration & Production index. The index measures the performance of the oil exploration and production sub-sector of the U.S. equity market. It includes companies that are engaged in the exploration for and extraction, production, refining, and supply of oil and gas products. The fund uses a representative sampling strategy to try to track the Index. It is nondiversified." Above descriptions are from the Yahoo profile page of the resepective security. Looking at the list of top 10 holdings of each, FCG has quite an eclectic collection of stocks, some of which are, IMO, not really great commodity price plays even though they have a lot of exposure to natty prices (examples would by EPEX and DPTR). IEO is heavily weighted toward the big boys such as OXY, DVN and APA. I don't have any investments in these ETF's since my whole "schtick" is to exploit the market inefficiences that often exist in the energy microcaps, so it makes no sense for me to buy the whole market. But I am finding these ETFs to be useful surrogates for seeing how the E&P stocks are trading as a sector. For example, as shown by the linked chart which compares the 3-month performance of FCG, IEO, and UNG, it is very clear that the E&P stocks have significantly lagged this recent surge in natty prices, finance.yahoo.com . As shown there, FCG and IEO, which are very highly correlated, have only gone up about 12% during the last 3 months, whereas UNG has gone up by something more like 22%. I believe this gap will gradually close as folks see natty prices holding up once we get past the draw season.