This ETF is one of several products that offers targeted exposure to the global energy industry, through FRAK is unique from the rest of the products in the Energy Equities ETFdb Category. Instead of focusing on Big Oil—companies such as ExxonMobil and Shall that are engaged in traditional energy sources—FRAK’s portfolio is comprised of stocks engaged in less conventional energy exploration techniques. Specifically, component stocks may operate in sectors of the energy market such as coalbed methane (CBM), coal seam gas (CSG), shale oil, shale gas, tight natural gas, tight oil and tight sands).
As such, this ETF may be useful for those who believe that unconventional energy sources will account for a growing portion of the global energy supply. Because this ETF consists of many companies not found in larger, more popular energy ETFs, it may offer a way to tap into a corner of the market not covered by more traditional products.
It should be noted that FRAK may exhibit greater volatility than other energy ETFs, since the portfolio is comprised of companies whose operations may not be as stable as major players in the energy arena. Investors seeking traditional energy exposure may prefer XLE or RYE, but for those seeking to specifically target unconventional energy stocks this ETF can be a very useful tool.