Why Clean Energy ETFs Are Cleaning Up

Aug. 16, 2013 7:06 AM ETSMOG, PBW, QCLN
Tom Lydon
78.36K Followers

Clean energy companies have rebounded in 2013 and the sector is climbing higher with President Obama's "Climate Change Action Plan" in focus. The latest IEA report supplies data that supports a further run-up in clean energy exchange traded funds.

"The International Energy Agency's (IEA) new policies imply that 57% of power capacity added during 2013-2030 will be from clean renewable resources (including large hydro). In fact, BNEF (Bloomberg New Energy Finance) estimates that wind and solar will take up the largest share of new power capacity added in terms of GW by 2030, accounting for 30% and 24%, respectively," Zacks Equity Research wrote.

The clean energy sector has also gathered support based on high gas and oil prices. Further issues surrounding global warming and high levels of carbon and greenhouse gas emissions have continued to boost the sector.

Clean energy ETFs such as the First Trust Nasdaq Clean Energy Green Energy Index (QCLN) have taken losses over the past few years as government subsidies and low demand took their toll. However, QCLN has gained 53.69% as of late June, over the one-year period. The ETF is evenly divided among small-caps and micro-cap stocks, with most companies domiciled in the United States.

Bloomberg analysts of BNEF reported that new annual investment in renewable power capacity will rise 2.5 to 4.5 times more between now and 2030. Cost efficacy of wind and solar energy technologies are forecast to jump 230% by the year 2030. Hydro, geothermal and biomass energy sources are expected to improve as well.

The PowerShares WilderHill Clean Energy ETF (PBW) invests 90% of the portfolio to companies related to clean energy. The companies are consistent with a growth strategy, and focuses in on technology, industrials and materials. PBW is up 32.43% over a one-year period. The Market Vectors

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78.36K Followers
Tom Lydon is editor and publisher of ETF Trends, a website with daily news and commentary about the fast-changing trends in the exchange traded fund (ETF) industry. Mr. Lydon is also CEO of Global Trends Investments, an investment advisory firm specializing in the creation of customized portfolios for high-net worth individuals. He has been involved in money management for more than 25 years. Mr. Lydon serves on the Board of Directors for U.S. Global Investors, Inc. and Guggenheim Investments. In early 2010, Mr. Lydon helped create the CNBC Model ETF Portfolios. Mr. Lydon is the author of The ETF Trend Following Playbook, as well as iMoney: Profitable Exchange-Traded Fund Strategies for Every Investor. He is Co-Founder of Virtual Summits, educational virtual events for financial advisors. Visit his site: ETF Trends (https://www.etftrends.com/) ETF Virtual The ETF Virtual Summit is the largest exchange traded fund (ETF) investment conference in the world. ETF Trends and RIA Database host this complimentary, interactive conference that exists completely online. The virtual showroom features keynote speakers, panel webinars, an exhibitor hall, a networking lounge and hot topic forums. Designed exclusively for Financial Advisors, this conference allows you to interact with experts in the ETF industry in a unique, virtual environment, avoiding the hassles and costs of traveling. Details on the conference, including agenda, past attendee statistics and sponsor information can be found at www.ETFVirtual.com. Alts Virtual The Alts Virtual Summit is the leading Alternative Investment conference for financial advisors. ETF Trends and RIA Database host this complimentary, interactive conference that exists completely online. The virtual showroom features keynote speakers, panel webinars, an exhibitor hall, a networking lounge and hot topic forums. Designed exclusively for Financial Advisors, this conference allows you to interact with experts in the Alternative Investment industry in a unique, virtual environment, avoiding the hassles and costs of traveling. Details on the conference, including agenda, past attendee statistics and sponsor information can be found at www.AltsVirtual.com.

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