This Day On The Street
Continue to site right-arrow
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
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

ETFs for Betting on Wind Power

Stocks in this article: PWND FAN

NEW YORK ( TheStreet) -- Alternative energy may at last have its time in the spotlight. With BP's (BP) (BP) oil disaster painting a dismal picture for the fossil fuel industry and Washington lawmakers gearing up to do battle over energy reform, exchange-traded funds such as First Trust ISE-Global Wind Energy Index Fund (FAN) could get a legislative lift.

One facet of the green energy industry which has recently received its fair share of press has been wind power. Thanks to a large injection of funding, the ground has been broken on what is considered to be the largest wind-farm project in the United States. This plant, located in the Mojave Desert, is set to cover thousands of acres of land and provide enough energy to power hundreds of thousands of homes.

The ETF market boasts a plethora of funds offering exposure to wind power companies as well as the broader alternative energy sector. But for true wind energy bulls, only two funds matter: PowerShares Global Wind Energy Portfolio (PWND) and First Trust ISE-Global Wind Energy Index Fund.

Although the two funds have similar goals, their internal structures have some differences.

Investors choosing PowerShares Global Wind Energy Portfolio opt to follow the Nasdaq OMX Clean Edge Global Wind Energy Index. This basket is comprised of 36 individual companies selected from around the globe. Geographically, the largest percentage of this index is in Spain and France. Top holdings include Iberdrola, EDP Renovaveis, Vestas Wind Energy, and China Longyuan Power. Together, these four positions make up more than 40% of the fund's total index. That's an unnervingly top-heavy fund.

First Trust ISE-Global Wind Energy Index Fund, which tracks the ISE Global Wind Energy Index, boasts a list of top positions nearly identical to that of PowerShares Global Wind Energy Portfolio. However, the First Trust fund is far less concentrated, dedicating only 28% of its assets to its top four holdings. Geographically, the fund's top countries include Spain and Germany.

The First Trust ISE-Global Wind Energy Index Fund is also the cheaper of the two options, boasting a 0.60% expense ratio vs. the 0.75% expense ratio of the PowerShares fund.

Over the past three months, the more concentrated PowerShares Global Wind Energy Portfolio has dipped slightly more than 11%, beating out its competitor, which has tumbled close to 14%.

Both products are effective in their ability to provide investors with pure-play exposure to the wind energy industry. However, they both have issues that are cause for concern. Most notably is their heavy exposure to the European Union.

1 of 2

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

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
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

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

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, 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
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

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

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 17,804.80 +26.65 0.15%
S&P 500 2,070.65 +9.42 0.46%
NASDAQ 4,765.38 +16.9840 0.36%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs