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Top 10 Alternative Energy ETFs

#5: Market Vectors Global Alternative Energy ETF (GEX)

GEX tracks the Ardour Global Index which follows global companies principally involved in the alternative energy business. The index is a rules-based, float adjusted index. The fund was launched May 2007. The expense ratio is .60%.

AUM is over $68M and average daily trading volume exceeds 40K shares. As of mid-February 2012 the annual dividend yield is 2.93% and YTD performance 15.31%. The one year return was also quite negative at -38.60%. 

GEX Top Ten Holdings & Weightings

Data as of First Quarter 2012

  1. Cooper Industries PLC. (CBE): 10.26%
  2. Enel Green Power S.p.A. (EGPW): 5.72%
  3. Kurita Water Industries Ltd. (KTWIF): 5.57%
  4. Vestas Wind Systems A/S (VWS): 5.02%
  5. Cree, Inc. (CREE): 4.98%
  6. Verbund AG (VER): 4.51%
  7. First Solar, Inc. (FSLR): 4.01%
  8. Polypore International, Inc. (PPO): 3.96%
  9. China Longyuan Power Group Corp Ltd. (CLPXF): 3.74%
  10. Itron Inc. (ITRI): 3.73%

#4: 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 $96 million and average daily trading volume at 45K shares. As of mid-February 2012 the annual dividend yield is 11.66% (this may be subject to significant change) and YTD performance 13.01%. The one year return was -30.15%. 

NOTE: 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 First Quarter 2012

  1. Electricité de France S.A. (EDF): 8.56%
  2. Exelon Corp (EXC): 7.77%
  3. Mitsubishi Heavy Industries, Ltd. (7011): 7.48%
  4. Areva (AREVA): 6.47%
  5. Constellation Energy Group Inc (CEG): 6.27%
  6. Cameco Corp (CCJ): 5.53%
  7. Central Vermont Public Service Corporation (CV): 4.78%
  8. JGC Corp. (1963): 4.68%
  9. Denison Mines Corporation (DNN): 4.67%
  10. US Ecology, Inc. (ECOL): 4.66%

#3: PowerShares WilderHill Progressive Energy ETF (PUW)

 

PUW follows the WilderHill Progressive Energy Index which includes issues found within PBW but adds some fossil fuel bridge technologies aimed at cleaner use of these fuels. Additionally, some nuclear issues have been included. The issue was launched October 2006.

The expense ratio is .60%. AUM equal $50M with average daily trading volume around 10K shares. As of mid-February 2012 the annual dividend yield is .95% and YTD performance 17.80%. The one year return was -10.46%

Note: PUW has a more inclusive holding of alternative energy including nuclear for example. 

 

PUW Top Ten Holdings & Weightings

Data as of First Quarter 2012

  1. Enersis SA ADR (ENI): 2.37%
  2. Centrais Eletricas Brasileiras SA ADR (EBR): 2.34%
  3. Energy Company of Minas Gerais ADR (CIG): 2.31%
  4. Owens-Corning, Inc. (OC): 2.30%
  5. Cameco Corp (CCJ): 2.27%
  6. Johnson Controls Inc (JCI): 2.26%
  7. McDermott International Inc (MDR): 2.25%
  8. Methanex Corporation (MEOH): 2.25%
  9. Siemens AG ADR (SI): 2.24%
  10. Covanta Holding Corporation (CVA): 2.22%

#2: 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.  As of mid-February 2012 the annual dividend yield is 2.05% and YTD performance 22.29%. The one year return was -41.78%. 

Note: Effective February 15, 2012 TAN had a 10 for 1 reverse split as the share price had gotten too low for the sponsor.

TAN Top Ten Holdings & Weightings

Data as of First Quarter 2012

  1. GCL-Poly Energy Holdings Limited (03800): 13.19%
  2. First Solar, Inc. (FSLR): 11.70%
  3. GT Advanced Technologies Inc (GTAT): 7.37%
  4. Meyer Burger Technology AG (MBTN): 6.64%
  5. Trina Solar Limited ADR (TSL): 4.78%
  6. SMA Solar Technology AG (S92): 4.73%
  7. MEMC Electronic Materials Inc (WFR): 4.44%
  8. SolarWorld AG (SWV): 4.07%
  9. Suntech Power Holdings Co., Ltd. ADR (STP): 3.80%
  10. Yingli Green Energy Holding Company, Ltd. (YGE): 3.78%

#1: PowerShares WilderHill Clean Energy ETF (PBW)

 

PBW is based on the WilderHill Energy Index. It seeks to focus on green energy technologies generally from renewable sources of energy. It was launched March 2005 and I was pleased to interview Professor Wilder then.

It is the oldest of the alternative energy ETF issues. The expense ratio is .60%. AUM (Assets under Management) equal $212M and average daily trading volume is around 345K shares. As of mid-February 2012 the annual dividend yield is 2.05% and YTD performance 22.29%. The one year return was -41.78%. 

 

PBW Top Ten Holdings & Weightings

Data as of First Quarter 2012

  1. Amyris, Inc. (AMRS): 2.51%
  2. Solazyme Inc (SZYM): 2.48%
  3. EnerNOC, Inc. (ENOC): 2.37%
  4. Cosan Ltd (CZZ): 2.35%
  5. Air Products & Chemicals Inc (APD): 2.34%
  6. Universal Display Corporation (PANL): 2.32%
  7. Idacorp, Inc. (IDA): 2.32%
  8. Calpine Corp (CPN): 2.32%
  9. CPFL Energy SA ADR (CPL): 2.29%
  10. Aixtron SE NA ADR (AIXG): 2.28%

The following is our stars ranking procedure with a brief description of the ranking rationale:


Strong established linked index
Excellent consistent performance and index tracking
Low fee structure
Strong portfolio suitability
Excellent liquidity


Established linked index even if "enhanced"
Good performance or more volatile if "enhanced" index
Average to higher fee structure
Good portfolio suitability or more active management if "enhanced" index
Decent liquidity


Enhanced or seasoned index
Less consistent performance and more volatile
Fees higher than average
Portfolio suitability would need more active trading
Average to below average liquidity


Index is new
Issue is new and needs seasoning
Fees are high
Portfolio suitability also needs seasoning
Liquidity below average

Again, given nuclear disasters, politics and incoherent 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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