Market Vectors Coal ETF on Fire

NEW YORK (TheStreet) -- The Propelled by an increase in global demand for coal, the Market Vectors Coal ETF (KOL Quote) has jumped nearly 140% year to date, and this fund is showing no signs of slowing down in the months ahead.

According to the "World Energy Outlook," published by the International Energy Agency last week, "coal remains the backbone fuel of the power sector worldwide." The report predicts that the demand for coal will continue to rise faster than that for any other fuel.

KOL tracks 40 global firms that derive at least 50% of their revenue from the coal industry. Top components include Peabody Energy Corp (BTU Quote), Consol Energy (CNX Quote), Arch Coal (ACI Quote) and Massey Energy (MEE Quote). The fund attracted a net cash flow of $17 million during the month of October, and currently has $299 million in assets. This focused fund has an expense ratio of 0.62%.

The demand for coal in emerging markets like China is skyrocketing, even as demand for other energy sources, like gas, drops. According to the IEA report, an abundant supply of natural gas in the U.S. should continue to put pressure on natural gas prices through the next decade.

The U.S. currently fulfills about 90% of its natural gas need through domestic production. Companies are now turning to alternative methods to produce additional natural gas. Recently, Pennsylvania officials opened nearly 32,000 additional acres of state forest for lease to shale gas drilling companies. The land is located over the massive Marcellus Shale formation.