Finally A Chemicals ETF? (DD, XLB, MXI)

With the rapid expansion of the exchange-traded products universe, finding sectors or sub-sectors not represented among ETFs and ETNs is a hard thing to do these days, but if one is to separate chemicals makers from the materials group, then there is no ETF devoted exclusively to companies such as Dow component DuPont (NYSE: DD).

Van Eck, parent company of Market Vectors, is looking to change and has filed plans with the Securities and Exchange Commission to possibly introduce the Market Vectors Global Chemicals ETF, which would track U.S.-based and international companies that depend on chemicals sales and production for at least half of their revenue.

The ETF would track the Market Vectors Global Chemical Index, a rules-based index that rebalances twice a year. As of February, the index comprised 158 securities with an average market capitalization of $7.8 billion, according to Index Universe.

Companies must have a market cap of at least $150 million and a three-month average daily trading volume of at least $1 million to be included in the index.

While there is currently no chemicals-specific ETF on the market, the Materials Select Sector SPDR (NYSE: XLB) features DuPont, Dow Chemical (NYSE: DOW) and Air Products & Chemicals (NYSE: APD) among its top-10 holdings. Those stocks combine for about 20% of XLB's weight.

The iShares S&P Global Materials Index Fund (NYSE: MXI) also offers exposure to chemical producers such as Dow, DuPont, Air Products and others.