And the oddities don't end there.

Also included in this portfolio is CNX Gas Corp (CXG). As its name implies, CXG is a natural gas producer, not a miner of coal. The company does extract its gas from coal, but it is not involved in mining coal at all.

In fact, the company it was spun off from, CONSOL Energy (CNX), is not only the second-largest holding in this ETF, but it retains the right to mine the actual coal from the very beds CNX pulls its gas from.

Technically, the Stowe Coal Index, upon which KOL is based, may allow for such inclusion. The index's definition says it includes "a limited number of companies engaged in the manufacture of ... coal to liquid."

Still, it's just an odd inclusion to make. And Queensland Gas in Australia is another holding which mines no coal, only natural gas from coal beds.

While these are sloppy inclusions, in our estimation, at least that inclusion of Queensland Gas can help steer this conversation back to one positive aspect of KOL upon which we can conclude: The ETF is truly global in nature.

This is important not only because coal is mined on every continent except Antarctica, but because coal miners in the Pacific Rim are particularly important to the surging coal demand stemming from Asia.

As such, the closer to home they can source their coal, the less India and China (which will become a net coal importer for the first time this year) have to pay in transportation costs to ship it in.

So, while KOL includes some very questionable holdings, for now it represents a respectable way for investors to gain exposure to coal commodity prices via equities.

Chip Hanlon is president of Delta Global Advisors, which oversees $1.5 billion in client assets for institutions and individuals.

1 | 2 |