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Van Eck Launches Alternative Energy ETF

The latest Market Vectors ETF provides exposure to pure plays on alternative energy around the world.

It's easier than you think being green -- at least when it comes to investing through exchange-traded funds.

The latest play on this increasingly crowded sector comes from

Van Eck

, which launched its

TST Recommends

Market Vectors-Global Alternative Energy ETF

(GEX)

on the

NYSE

Wednesday.

The new entry tracks the performance and yield of the

Ardour Global Alternative Energy Index (Extra Liquid)

, which includes stocks of companies all over the world involved in alternative and renewable energy technologies.

The listing comes at a time when you no longer have to own

An Inconvenient Truth

on DVD to be thinking about investing in alt-energy. The Supreme Court ruled last month that the Environmental Protection Agency has the power to curb greenhouse gas emissions. Many think this decision will eventually lead to regulations that make "cleaner" energy sources such as wind, solar and geo-thermal more attractive in the U.S.

And the European Union vowed in March that 20% of its energy needs will come from renewable sources by 2020.

The Market Vectors-Global Alternative Energy ETF is meant to give investors exposure to the most-widely held and traded "pure plays" in the sector. The Ardour Global Alternative Energy Index (Extra Liquid) screens 250 companies from the U.S., Europe and Asia that derive at least 50% of their revenue from alternative energy. Only the 30 stocks with the highest average daily trading volume and largest float-adjusted market capitalization actually make the index, which is rebalanced quarterly.

Van Eck's ETF sales director Adam Phillips says the biggest strength of the product is the diversification it offers. "In the alternative energy space, it is difficult to pick stocks, so an ETF is a perfect match," he says.

Danish wind power company

Vestas

is currently the most heavily weighted component of the Ardour index, making up nearly 11%. Major U.S. companies include semiconductor manufacturer

International Rectifier

(IRF)

,

First Solar

(FSLR) - Get Report

and

Pacific Ethanol

(PEIX) - Get Report

. According to Van Eck, 77% of the companies in the index turn a profit.

Other recently-launched alternative energy ETF's include the

First Trust Nasdaq Clean Edge Fund

(QCLN) - Get Report

, which debuted in February, and the

PowerShares Cleantech Portfolio

(PZD) - Get Report

, which started trading in October of last year.