This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

ETFs for Obama's Climate Change Agenda

NEW YORK ( TheStreet) -- President Obama has said he wants to finish financial reform over the coming weeks and then tackle energy and climate policy reform. Investors who believe Obama will pursue his energy policies with the same persistence he used to push through his health care reform policies should think about alternative energy ETFs now.

The hype leading up to the implementation of this legislation could lead to a run-up in Global Alternative Energy ETF (GEX).

The House of Representatives passed a bill last year requiring the United States to reduce its carbon emissions by 17% from 2005 levels by 2020. The Senate hasn't yet passed similar legislation, but Obama is confident he can drum up bipartisan support for his climate policies.

The clean energy source that will be most favored in climate legislation is still anyone's guess, so investors should prioritize gaining exposure to a wide variety of technologies. The fund that does this best is GEX, which has exposure to alternative energy companies, clean energy technology, and firms working on energy efficiency.

Government support for clean energy could benefit companies around the world, but investors looking for a bullish ETF play on Obama's energy policy should target funds that allocate heavily to American companies. The president is confident that a thriving clean energy sector in America will ease unemployment and this means his energy policies likely will be most favorable for companies in the United States.

Some of the largest holdings in GEX are U.S. companies such as Cree (CREE - Get Report), First Solar (FSLR - Get Report) and Itron (ITRI - Get Report), which account for 8.2%, 7.1%, and 4.2% of net assets, respectively. Overall, GEX has 47.2% exposure to U.S. firms.

If investors want to try and predict which sub-sector of clean energy will benefit the most from future legislation, they can choose a single sector clean energy ETF. For the solar industry, the most popular fund is Claymore/MAC Global Solar Energy Index ETF (TAN). For wind, the most liquid option is First Trust Global Wind Energy (FAN), although it still trades less than 50,000 shares each day on average.

For a play on the infrastructure that would transmit clean energy from its source to consumers, there is First Trust NASDAQ Clean Edge Smart Grid Infrastructure Index Fund (GRID). GRID only trades about 15,000 shares on an average trading day.

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG
TAN $43.69 -0.52%
GRID $36.95 1.51%
GEX $64.22 1.10%
FAN $12.18 0.79%
CREE $30.04 2.74%

Markets

DOW 18,162.99 +121.45 0.67%
S&P 500 2,123.48 +19.28 0.92%
NASDAQ 5,106.5930 +73.8420 1.47%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs