The investment firm founded by T. Boone Pickens has made it easier to mimic the legendary oilman's investing strategy.
BP Capital Advisors and the New York Stock Exchange launched an exchange-traded fund on Wednesday engineered to reflect Pickens' philosophy for profiting from the U.S. oil and gas revolution. It's the first time the NYSE has promoted an ETF tied to an individual investor.
The ETF goes by the ticker BOON.
Pickens, who has disclosed his health is declining, has recently stepped back from many of his remaining endeavors. He announced the closure of his hedge fund last month, though BP Capital will continue to operate its energy-focused mutual funds.
The new exchange-traded fund, dubbed the NYSE Pickens Oil Response ETF, offers investors exposure to shares of companies that both produce and consume U.S. oil and gas.
The surge in U.S. oil and gas production in recent years has benefited a range of manufacturers by creating a low-cost supply of domestic fossil fuels, as well as the petroleum byproducts on which many manufacturers rely.
The rationale behind the ETF is that investors can balance the risk inherent in the volatile energy sector through exposure to suppliers, which benefit from higher oil and gas prices, and end users, which profit when commodity costs fall.
Some of the commodity buyers included in the fund are aluminum maker Alcoa and chemical company LyondellBasell.
BP Capital's Twinline Fund has followed the so-called Pickens Plan for years. The Pickens Oil Response ETF is composed of 81 stocks and tracks an index of the same name previously designed by BP and NYSE owner Intercontinental Exchange.
"This Index was designed with the same spirit as the Pickens Plan. It too incorporates the demand side of energy," Toby Loftin, managing principal of BP Capital, said in a video message earlier this month.
"We believe that that approach is a better way to invest in energy over the long term."