Invest Like Boone Pickens With These ETFs
With 13F filing season here, investors now have an opportunity to see what some of the biggest names in finance were buying and selling in the second quarter. Whether it was Bill Ackman buying shares of Procter & Gamble (NYSE: PG) or Warren Buffett unloading some of his stake in the same stock, investors love updates on what their heroes have been buying and selling.
Legendary oilman T. Boone Pickens is among the more followed names come 13F season. Filings from his BP Capital Management LP are a must read for energy investors. While BP Capital Management invests with dollar amounts most investors do not have access to, mirroring the moves Pickens makes can be done with the help of ETFs.
PowerShares Water Resources ETF (NYSE:PHO) This one might confuse some folks because Pickens is known more as an oil and gas guy and the most recent 13F from BP Capital does not show any significant stakes in individual water equities. However, Pickens has made water investments in the past through buying and selling water rights.
In fact, he is one of the largest owners of water rights in the U.S. Given the global water shortage, a lot of folks have said water could be the next oil. That remains to be seen, but there is no denying the PowerShares Water Resources ETF has been a sound bet this year. PHO is up 12 percent and could be in for more upside if it takes out the 52-week high near $19.50.
First Trust ISE-Revere Natural Gas Index Fund (NYSE:FCG) The Pickens push for increased use of natural gas in the U.S. is widely known and he does put his money where is mouth, either through political initiatives or through owning natural gas equities. While BP Capital did pare its stake in SandRidge Energy (NYSE:SD) during the second quarter and eliminate its investment in Chesapeake Energy (NYSE:CHK), the second-largest U.S. natural gas producer, the firm still holds plenty of stocks that can be found in FCG.
BP added stakes in Anadarko Petroleum (NYSE:APC), Apache (NYSE:APA), EOG Resources (NYSE:EOG), McMoRan Exploration (NYSE:MMR), Quicksilver Resources (NYSE:KWK) and Southwestern Energy (NYSE:SWN), among others, during the quarter. Combined with SandRidge, those stocks account for about 20 percent of FCG's weight making the ETF an ideal way for investors to mirror Pickens.
Market Vectors Oil Services ETF (NYSE:OIH) Oil services stocks have participated in the recent energy sector bounce, but Picken has been trimming his exposure to the sector and investors should know that before running into OIH. During the second quarter, BP Capital eliminated its investments in Schlumberger (NYSE:SLB) and Halliburton (NYSE:HAL), the world's two largest oil services providers.
The firm also pared stakes in National Oilwell Varco (NYSE:NOV) and Weatherford International (NYSE:WFT). Schlumberger, National Oilwell Varco and Halliburton combine for about 40 percent of OIH's weight. On the other hand, it is worth noting that Buffett's Berkshire Hathaway (NYSE: BRK.A)(NYSE: BRK.B) added National Oilwell Varco to its roster of equity of holdings during the second quarter.
Market Vectors Unconventional Oil & Gas ETF (NYSE:FRAK) Pickens has been a strident supporter of increasing domestic energy production and part of that includes hydraulic fracturing at U.S. shale plays. FRAK is a new ETF (it debuted in February 2012), but it has almost $22 million in assets under management, not a terrible haul in this environment. More importantly, FRAK has jumped 9.1 percent in the past month.
FRAK is home to 45 stocks and four BP Capital holdings are found among the ETF's top-10 lineup. Anadarko, Occidental Petroleum (NYSE:OXY), EOG and Devon Energy (NYSE:DVN) combine for about 20 percent of FRAK's weight.
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