Inflows Spike to PowerShares WilderHill Clean Energy Portfolio ETF (PBW)

The Wall Street Journal reports that Hurricane Katrina and rising oil prices have boosted inflows into the PowerShares WilderHill Clean Energy Portfolio exchange-traded fund, ticker PBW. According to the WSJ, "In the two weeks ended Friday -- during which time Katrina damaged oil rigs and refineries -- the clean-energy fund's assets grew 58% to $129 million." But the article also warns investors via a quote:

"It's dangerous to invest in funds that have recently spiked," Morningstar analyst Dan Culloton said. "They can do the same thing to you on the way down."

The PowerShares WilderHill Clean Energy Portfolio is actually a rather concentrated fund; it holds only 37 stocks. And according to PowerShares' web site, Capstone Turbine Corp. (ticker: CPST) accounts for 8.37% of the fund, Distributed Energy Systems Corp. (ticker: DESC) 4.07%, and IMPCO Technologies Inc. (ticker: IMCO) 4.05%).

Three utility stocks are also in the portfolio: Ormat Technologies Inc. (ticker: ORA), ScottishPower PLC (ticker: SPI) and IDACORP Inc. (ticker: IDA).

That raises an interesting possibility for traders. If you think that inflows into the fund will continue, one possible strategy is to buy the top holdings of the fund and save yourself the 0.6% annual expense ratio and the bid-ask spread, currently about 0.34%.

The full WSJ article is here (paid subscription required).