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Top 10 Alternative Energy ETFs

 #6: Guggenheim Solar ETF (TAN)

TAN follows the MAC Global Solar Energy Index which has a more global focus. It's constructed with constituents including ADRs, in all phases of the solar industry from developers, module manufacturers, marketing, selling and financing. The fund was launched April 2008. The expense ratio is .65%. AUM is roughly $63M and average daily volume is over 470K shares.  Through late November, 2011 the annual dividend yield was 1.08.14% with a YTD return at -62.60%.

TAN Top Ten Holdings & Weightings

Data as of November, 2011

  1. GCL-Poly Energy Holdings Limited (03800): 11.09%
  2. First Solar, Inc. (FSLR): 10.35%
  3. Meyer Burger Technology AG (MBTN): 6.65%
  4. GT Advanced Technologies Inc (GTAT): 6.25%
  5. MEMC Electronic Materials Inc (WFR): 5.33%
  6. Trina Solar Limited ADR (TSL): 4.42%
  7. SMA Solar Technology AG (S92): 4.05%
  8. Yingli Green Energy Holding Company, Ltd. (YGE): 3.82%
  9. Renewable Energy Corporation ASA (REC): 3.71%
  10. SolarWorld AG (SWV): 3.58%


#7: First Trust ISE Global Wind Energy ETF (FAN)

FAN follows the ISE Global Wind Energy Index which consists of companies exclusively involved in the wind energy business account for a 66% index weight. The fund was launched in June 2008. The expense ratio is .60%. AUM equals $40M with average daily trading volume of 29K shares. As of late November 2011 the annual dividend yield was roughly .74% and YTD return of -26.10%.

FAN Top Ten Holdings & Weightings

Data as of November, 2011

  1. Hansen Transmissions International NV (HSN): 9.12%
  2. EDP Renovaveis SA (EDPR): 8.01%
  3. REpower Systems AG (RPW): 7.67%
  4. Iberdrola SA (IBE): 7.61%
  5. China Longyuan Power Group Corp Ltd. (CLPXF): 6.42%
  6. Vestas Wind Systems A/S (VWS): 5.56%
  7. Gamesa Corporacion Tecnologica, S.A. (GAM): 3.90%
  8. Nordex AG (NDX1): 3.19%
  9. China WindPower Group Ltd. (CWPWF): 3.10%
  10. Infigen Energy (IFN): 2.42%

#8: Market Vectors Solar Energy ETF (KWT)

KWT follows the Ardour Solar Energy Index includes publicly traded companies globally that derive two-thirds of their revenue from solar power and related products. Weighted companies receive 90% of their revenues in this manner. The fund was launched April 2008. The expense ratio is .65%. AUM are over $10M and average daily trading volume is around 39K shares. As of late November 2011 the annual dividend yield was $1.71 and YTD return was -65.00%. (Note: Most ETFs need to have AUM over $25M to be considered a success. Most losses of AUM are due to market conditions but that doesn't mean the ETF can survive in this condition  and not be folded in with another issue for example or even cease to exist.)

KWT Top Ten Holdings & Weightings

Data as of November, 2011

  1. MEMC Electronic Materials Inc (WFR): 11.53%
  2. First Solar, Inc. (FSLR): 10.74%
  3. GT Advanced Technologies Inc (GTAT): 9.25%
  4. SMA Solar Technology AG (S92): 5.73%
  5. Gintech Energy Corporation (3514): 5.65%
  6. STR Holdings, Inc. (STRI): 4.18%
  7. SolarWorld AG (SWV): 4.09%
  8. Neo Solar Power Corp. (3576): 4.04%
  9. Yingli Green Energy Holding Company, Ltd. (YGE): 3.97%
  10. Trina Solar Limited ADR (TSL): 3.56%

#9: PowerShares Global Wind Energy ETF (PWND)

PWND follows the NASDAQ OMX Clean Edge Global Wind Energy Index which is a lot of words to say "wind ETF". The fund was launched July 2008. The expense ratio is .75%. AUM is just shy of $16M which is again below the threshold for reasonable issue success. Average daily trading volume is just under 10K shares. As of late November 2011 the annual dividend yield was .25% and YTD return -33.00%.

PWND Top Ten Holdings & Weightings

Data as of November, 2011

  1. Enel Green Power S.p.A. (EGPW): 11.32%
  2. China Longyuan Power Group Corp Ltd. (CLPXF): 11.22%
  3. EDP Renovaveis SA (EDPR): 10.05%
  4. Vestas Wind Systems A/S (VWS): 9.62%
  5. Hansen Transmissions International NV (HSN): 4.42%
  6. REpower Systems AG (RPW): 4.26%
  7. Innergex Renewable Energy, Inc. (INE): 4.16%
  8. China WindPower Group Ltd. (CWPWF): 3.88%
  9. Gamesa Corporacion Tecnologica, S.A. (GAM): 3.81%
  10. Huaneng Renewables Corporation Ltd (00958): 3.74%

#10: Market Vectors Uranium + Nuclear Energy ETF (NLR)

NLR follows the DAXglobal Nuclear Energy Index. The fund was launched August 2007. The expense ratio is .57%. AUM are now $107M and average daily trading volume at 36K shares""both less than half the levels from June. As of late November 2011 the annual dividend is $1.06 making the yield 6.44% which is the highest in the space and YTD return was -35.50%. Japan's Fukushima plant disaster has hit the sector hard. Investors should remember while new nuclear plants will be difficult to permit ongoing servicing and construction of new plants will continue albeit with the latter at slower pace. Political risks are high in the sector and the attraction of the dividend yield may mislead as some companies "may" reduce these given the business slowdown.

NLR Top Ten Holdings & Weightings

Data as of November 2011

  1. Electricité de France S.A. (EDF): 9.31%
  2. Exelon Corp (EXC): 8.28%
  3. Areva (AREVA): 8.16%
  4. Mitsubishi Heavy Industries, Ltd. (7011): 8.13%
  5. Constellation Energy Group Inc (CEG): 5.47%
  6. Cameco Corp (CCJ): 5.33%
  7. Central Vermont Public Service Corporation (CV): 5.23%
  8. Kajima (1812): 4.57%
  9. Hathor Exploration Ltd. (HTHXF): 4.53%
  10. JGC Corp. (1963): 4.42%

 

Again, given nuclear disasters, politics and incoherent or effective energy policies risks within this sector remain high.

As with any ETF sector remember the business interest of sponsors aren't necessarily aligned with your investment interests and objectives. Always keep this in mind.

New ETFs from highly regarded and substantial new providers are also being issued. These may include Charles Schwab's ETFs and Scottrade's Focus Shares which both are issuing new ETFs with low expense ratios and commission free trading at their respective firms. These may also become popular as they become seasoned. 

For further information about portfolio structures using technical indicators like DeMark and other indicators, take a free 14-day trial at ETF Digest. Follow us on Twitter and Facebook as well and join our group conversations.

You may address any feedback to: feedback@etfdigest.com  

The ETF Digest has no current positions in the featured ETFs.

(Source for data is from ETF sponsors and various ETF data providers)

 

This commentary comes from an independent investor or market observer as part of TheStreet guest contributor program. The views expressed are those of the author and do not necessarily represent the views of TheStreet or its management.

Dave Fry is founder and publisher of ETF Digest, Dave's Daily blog and the best-selling book author of Create Your Own ETF Hedge Fund, A DIY Strategy for Private Wealth Management, published by Wiley Finance in 2008. A detailed bio is here: Dave Fry.

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