New Global Wind Energy ETF: Investing is a Breeze

Jun.20.08 | About: First Trust (FAN)

By Jason Neault

The much anticipated First Trust ISE Global Wind Energy ETF (NYSEARCA:FAN) launched this week with healthy trading volume and a tight spread. Renewable energy has been a hot topic as of late, especially wind energy because of its low cost, and high efficiency. With the launch of this new fund, investors now have a chance to profit from companies in the wind energy business, as well as companies that will be entering the space.

The First Trust ISE Global Wind Energy ETF (FAN) will aim to track the ISE Global Wind Energy Index. The index is comprised of companies that provide goods and services to the wind energy industry, and companies “determined to be significant participants in the wind energy industry despite not being exclusive to such industry”. In order to be considered for the index, the company must be engaged in some aspect of the wind energy industry such as manufacturing or design of machinery, distribution of materials, management of a wind farm, or distribution of wind generated electricity. The current top ten of the 52 holdings in the fund are as follows:

  • REpowersystems AG - 10.51%
  • Vestas Wind Systems - 10.28%
  • Gamesa - 8.81%
  • Hansen Transmissions - 6.80%
  • Japan Wind Dev. Co. - 5.13%
  • Babcock & Brown Wind Partners - 4.40%
  • Nordex AG - 4.34%
  • Theolia SA - 4.28%
  • Clipper Windpower - 2.94%
  • Gurit Holding AG - 2.81%

On a fundamental basis, the trailing P/E ratio for the fund is 25, and price to sales is around 2.2. The total net assets for the fund are around $9.1 million, but this is likely to balloon as more investors move into the fund. The expense ratio for the fund is 0.60%, and trades on the NYSE Arca exchange.

Disclosure: none