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The Jefferies | TR\/J CRB Wildcatters Exploration & Production Equity ETF (WCAT) began trading yesterday (January 20, 2010). WCAT, the latest ETF from Jefferies Asset Management, provides exposure to small-cap and mid-cap American or Canadian companies that are principally engaged in energy exploration and production.<\/p>\n
Stocks must have a market capitalization between USD 200 million and USD 2 billion to be eligible for inclusion in the index. The underlying index has a weighting of 44% in midcap stocks and 56% in small caps. The country allocation is about 68% US and 32% Canada.<\/p>\n
The fund currently has 55 holdings with the top 10 being Forest Oil (FST) 5.8%, Encore Acquisition (EAC) 5.1%, St. Mary Land & Exploration (SM) 4.7%, Atlas Energy (ATLS) 4.6%, Progress Energy Resources (PRQ.TO) 4.0%, Quicksilver Resources (KWK) 3.7%, Comstock Resources (CRK) 3.7%, Arena Resources (ARD) 3.2%, Sandridge Energy (SD) 3.0%, and Bill Barrett Corp (BBG) 3.0% (complete list of holdings).<\/p>\n
The WCAT overview page shows an expense ratio of 0.65%. Currently three other ETFs cover the exploration & production sector: iShares DJ US Oil & Gas Exploration & Production (IEO) with a 0.48% expense ratio (IEO overview), SPDR S&P Oil & Gas Exploration & Production (XOP) with a 0.35% expense ratio (XOP overview), and PowerShares Dynamic Energy Exploration & Production (PXE) with a 0.60% expense ratio (PXE overview).<\/p>\n
The new Wildcatters ETF is unique in its mid and small-cap focus. For example, more than 80% of the iShares IEO is invested in about two dozen stocks that have larger capitalizations than any of the stocks in WCAT. The XOP SPDR takes a different approach, equally weighting 35 large and mid-cap stocks in this sector, but it still contains a lot of names not found in WCAT. PowerShares PXE holds 30 stocks that change on a number of factors that currently results in about 60% of PXE holding mid and small-cap names.<\/p>\n
As Jefferies adds new literature about WCAT to their website, it will be found here.<\/p>\n