Why I Am Adding PBD To My Stock Portfolio

Oct.23.07 | About: PowerShares Global (PBD)

I am a contributor for Ecotality Life, where I write posts about green/alternative energy investments. I check several alternative energy and green news sites regularly for new ideas to write about and have found one to add to my 20 Stock Portfolio on this blog.

I have found there are a significant number of very progressive and profitable alternative energy companies that do not trade on the U.S. Exchanges, or maybe as unsponsored ADRs in the pink sheets. So I was pleased to discover the PowerShares Global Clean Energy ETF, (NYSEARCA:PBD). This ETF tracks the WilderHill New Energy Global Innovation Index, symbol NEX. Some facts about the ETF:

  • The NEX currently consists of 88 stocks from 21 countries traded on 25 different stock exchanges.
  • Weighted region breakdown:
    • 48.3%: Europe, Middle East & Africa
    • 34.0%: The Americas
    • 17.7%: Asia & Oceania
  • The top sectors of renewable wind, solar, bio-fuels and other renewables make up 73% of the portfolio by weight.
  • No holding is allowed to exceed 2.5%. The top 10 are 25% of the portfolio and the portfolio is rebalanced quarterly.
  • The index has had a 3 year annualized return of 36.9%. The ETF has been out since the end of June 2007.

I had previously looked at the Market Vectors-Global Alternative Energy ETF, (GEX), but found the index it mirrored had only 30 stocks and was a bit top heavy. The top two stocks are 20% of the index and all of the stocks are from North America and Europe. PBD is much more diversified. GEX has outperformed PBD since the latter debuted, but as we all know, past performance puts no money in the brokerage account.

So for its diversity, access to non U.S. traded stocks, and broad exposure to alternative energy companies I am adding PBD to my 20 Stock Portfolio.

The 20 Stock Portfolio is an hypothetical portfolio to track stocks I am interested in for this blog. I own some but not all of the stocks in the portfolio. I currently do not have a position in PBD.