Clean-Energy ETFs Volatile, but Hold Potential

Clean-energy stocks may have a place in the portfolios of long-term investors, but it could be some time before the cloud cover lifts.

Last year was a bright one for clean-energy ETFs such as the PowerShares WilderHill Clean Energy Fund(PBW Quote), the PowerShares Global Clean Energy Fund(PBD Quote) and the Market Vectors Global Alternative Energy ETF(GEX Quote). These funds outperformed the market by considerable margins.

This year has been a completely different story. The repricing of risk has taken the wind out of their sails. Year to date, these funds are down 33.4%, 25.3% and 29.8% respectively, while the S&P 500 is only down 11.6% over this same period.

Now, the question is whether these sharp pullbacks make for ideal buying opportunities, or whether these funds will face further selloffs. ...