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Harris Roen is a financial writer with a passion for understanding the economic activity of our interconnected world. His previous experience of over 15 years as a professional portfolio manager helps him ground-truth the hype through independent research and analysis, providing valuable... More
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Roen Financial Report
  • Alternative Energy ETFs And Mutual Funds Among Top Gainers In Entire Fund Universe  0 comments
    Nov 21, 2013 2:41 PM

    Alternative energy MFs and ETFs posted record gains in the past 12 months. Guggenheim Solar (NYSEARCA:TAN) and Market Vectors Solar Energy (NYSEARCA:KWT) are the top two performers out of more than 1,500 ETFs. Firsthand Alternative Energy (MUTF:ALTEX) and Guinness Atkinson Alternative Energy (MUTF:GAAEX) are in the top ten for over 28,000 mutual funds.

    Mutual Funds

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    Returns overall have been spectacular for alternative energy MFs. Even the lowest performer is up 27% in the past 12 months. The best performers are those strongly invested in solar, specifically ALTEX and GAAEX, as the solar sector has been on an absolute tear. It should be noted, however, that some of these high fliers are still down from their highs of several years ago.

    A new fund has been added to our ranking list, Green Century Balanced (MUTF:GCBLX). It does not specifically invest in alternative energy companies, but instead has a broader green investment agenda. Its principal strategy is to invest in "environmentally responsible and sustainable U.S. companies, many of which also make positive environmental contributions." There is a good Reuter's article on GCBLX, recommending it for the fossil fuel divestment crowd. It comes onto our alternative energy mutual fund list as a Rank 2 (funds are ranked from 1 to 5, with 1 being the best).

    Exchange Traded Funds

    (click to enlarge)

    Returns for alternative energy ETFs have been strong, like their MF counterparts, though gains have been much more variable. TAN has returned an astounding 240% for the year, and Market Vectors Solar Energy gained 185%.

    Of the two funds, TAN is higher ranked due to several factors. TAN is a much larger ETF, managing over $400 million as compared to about $30 million invested by KWT. This makes TAN a more stable investment platform. Additionally, TAN has somewhat better fundamentals in its underlying assets when looking at price/sales and forward price/earnings ratios.

    On the down side, three of the alternative energy ETFs show a loss for the year. iPath Global Carbon ETN (NYSEARCA:GRN) is down by more than half, reflecting the continued struggle in European carbon markets.

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

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