Our goal in this profile is to help investors wade through the many competing ETF offerings available. Using our long experience as an ETF publication, we can help select those ETFs that matter and may not be repetitive. The result is a more manageable list of issues from which to choose from. 

There are currently less than 20 ETFs oriented to the alternative energy sector. Many are struggling to gain AUM (Assets under Management) and performance success. Some may not succeed as new technologies come and go. Previously nuclear energy held great promise until the Fukushima plant disaster despite its age and unique circumstances blunted growth in the sector.

The energy sector remains volatile and politically controversial given the recent higher spikes in prices in 2008 and 2011. The struggle to move away from carbon based energy sources seems now and again promising, but then not. Any success will take years and decades to achieve success. This adds to the risks of investing in the sector. As a result you'll note AUM are lower in the sector and performance has been less than conventional energy ETFs.

The following analysis features a fair representation of ETFs available. We believe from these, investors may choose an appropriate ETF to satisfy the best index-based offerings individuals and financial advisors may utilize.

We're not ranking these ETFs favoring one over another so don't let the listing order mislead you. Although we may use some of these in ETF Digest portfolios it's not our intention to recommend one over another.

ETFs are based on indices tied to well-known index providers including Russell, S&P, Barclays, MSCI, Dow Jones and so forth. Also included are some so-called "enhanced" indexes that attempt to achieve better performance through more active management of the index.

Where competitive issues exist and/or repetitive issues available at a superior fee cost saving we mention those as other choices.


PBW (PowerShares WilderHill Clean Energy ETF) 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 $468M and average daily trading volume is around 345K shares. As of July 1, 2011 the dividend is negligible and YTD performance is -12.51%.

Data as of June 2011

PBW Top Ten Holdings & Weightings

  1. SunPower Corporation (SPWRA):  2.71%
  2. Molycorp, Inc. (MCP): 2.65%
  3. Ameresco, Inc. (AMRC): 2.45%
  4. Tesla Motors, Inc. (TSLA):  2.38%
  5. Rare Element Resources Ltd. (REE): 2.38%
  6. Amerigon, Inc. (ARGN): 2.33%
  7. Fuel Systems Solutions, Inc. (FSYS):  2.33%
  8. Sociedad Quimica Y Minera De Chile SA ADR (SQM):  2.27%
  9. Rubicon Technology, Inc. (RBCN):  2.22%
  10. Polypore International, Inc. (PPO):  2.17%

 

PUW (PowerShares WilderHill Progressive Energy ETF) 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 67M with average daily trading volume around 14K shares. Through July 1, 2011 the annual dividend is $.23 making the yield .82% and YTD return of 1.52%.

Data as of 2011-06-03

PUW Top Ten Holdings

  1. Westport Innovations (WPRT):  2.64%
  2. Rockwood Holdings, Inc. (ROC):  2.37%
  3. Clean Energy Fuels Corporation (CLNE):  2.33%
  4. GrafTech International, Inc. (GTI):  2.32%
  5. Hexcel Corporation (HXL):  2.26%
  6. Altra Holdings, Inc. (AIMC):  2.23%
  7. General Cable Corporation (BGC):  2.23%
  8. Siemens AG ADR (SI):  2.23%
  9. Owens-Corning, Inc. (OC):  2.20%
  10. Energizer Holdings, Inc. (ENR):  2.20%

 

PBD (PowerShares Global Clean Energy ETF) follows the WilderHill Global Innovation Index which is distinguished marginally by an exposure to companies with technologies facilitating cleaner energy. The fund was launched June 2007. The expense ratio is .75%. AUM equal $143M and average daily trading volume is around 52K shares. As of July 2011 the annual dividend was $.08 with the yield .55% and YTD return of -.79%.

 

Data as of June 2011

PBD Top Ten Holdings & Weightings

  1. Enel Green Power S.p.A. (EGPW):  1.95%
  2. Energy Development (EDC) Corporation:  1.90%
  3. Contact Energy Limited (CEN-NZ):  1.86%
  4. SunPower Corporation (SPWRA):  1.83%
  5. GCL-Poly Energy Holdings Limited (03800):  1.76%
  6. Verbund AG (VER):  1.72%
  7. Tesla Motors, Inc. (TSLA):  1.68%
  8. Ormat Technologies, Inc. (ORA):  1.68%
  9. Meyer Burger Technology AG (MBTN):  1.65%
  10. Edf Energies Nouvelles (EEN):  1.55%

TAN (Guggenheim Solar ETF) 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 $170M and average daily volume is over 600K shares. Through June 2011 the annual dividend is only $.01 making the yield .14% with YTD return -2.60%.

Data as of July 2011

TAN Top Ten Holdings &Weightings

  1. First Solar, Inc. (FSLR): 19.36%
  2. GCL-Poly Energy Holdings Limited (03800):  9.23%
  3. GT Solar international (SOLR):  6.67%           
  4. Meyer Burger Technology AG (MBTN):  6.23%
  5. Trina Solar Limited ADR (TSL):  5.19%
  6. SunPower Corporation (SPWRA):  3.73%
  7. SolarWorld AG (SWV):  3.82%
  8. SMA Solar Technology (S92.DE):  3.53%
  9. Suntech Power Holdings ADR (STP):  3.49%
  10. MEMC Electronic Materials Inc (WFR):  3.43%

KWT (Market Vectors Solar Energy ETF) 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 $32M and average daily trading volume is around 60K shares. As of July 2011 the annual dividend was $.07 making the yield .62% and the YTD return was -2.64%.

Data as of June 2011

KWT Top Ten Holdings & Weightings

  1. First Solar, Inc. (FSLR):  9.11%
  2. Trina Solar Limited ADR (TSL):  8.96%
  3. MEMC Electronic Materials Inc (WFR):  8.93%
  4. Renewable Energy Corporation ASA (REC):  7.63%
  5. SolarWorld AG (SWV):  5.92%
  6. SunPower Corporation (SPWRA):  5.32%
  7. Yingli Green Energy Holding Company, Ltd. (YGE):  4.96%
  8. SMA Solar Technology AG (S92):  4.70%
  9. Suntech Power Holdings Co., Ltd. ADR (STP):            4.35%
  10. JA Solar Holdings Co., ADR ADR (JASO):  3.81%

 

GEX (Market Vectors Global Alternative Energy) track 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 .62%. AUM is over $125M and average daily trading volume exceeds 65K shares. As of July 2011, the annual dividend is $.19 making the yield 1% with a YTD return of -5.65%.

Data as of June 2011

GEX Top Ten Holdings & Weightings

  1. First Solar, Inc. (FSLR):  9.38%
  2. Vestas Wind Systems A/S (VWS):  8.99%
  3. Cree, Inc. (CREE):  5.76%
  4. Enel Green Power S.P.A. (EGPW):  5.71%
  5. Iberdrola Energias Renovables SA (IBR):  5.30%
  6. Verbund AG (VER):  4.89%
  7. Kurita Water Industries Ltd. (6370):  4.54%
  8. MEMC Electronic Materials Inc (WFR):  3.79%
  9. International Rectifier (IRF):  3.49%
  10. Covanta Holding Corporation (CVA):  3.25%

 

ICLN (iShares S&P Global Clean Energy ETF) tracks the S&P Global Clean Energy Index. The fund was launched in June 2008. The expense ratio is .48%. AUM exceeds $71M and average daily trading volume is 28K shares. As of June 2011 the annual dividend is $.22 making the yield 1.33% with a YTD return of 3.09%.

Data as of 2011-06-03

ICLN Top Ten Holdings

  1. China Longyuan Power Group Corp Ltd. (CLPXF):  5.59%
  2. Verbund AG (VER):  5.35%
  3. Iberdrola Energias Renovables SA (IBR):  5.34%
  4. SunPower Corporation (SPWRA):  5.34%
  5. National Electricity Company of Chile, Inc. ADR (EOC):  5.28%
  6. Enel Green Power S.P.A. (EGPW):  5.16%
  7. Energy Company of Minas Gerais ADR (CIG):             4.99%
  8. Energy Company of Parana ADR (ELP):  4.82%
  9. Gamesa Corporacion Tecnologica, S.A. (GAM):  4.71%
  10. First Solar, Inc. (FSLR):  4.58%

 

FAN (First Trust ISE Global Wind Energy ETF) 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 $53M with average daily trading volume of 73K shares. As of June 2011 the annual dividend is $.18 making the yield roughly 1.74% and YTD return of 3.61%.

Data as of June 2011

FAN Top Ten Holdings & Weightings

  1. EDP Renovaveis SA (EDPR):  8.35%
  2. Iberdrola Energias Renovables SA (IBR): 8.33%
  3. Vestas Wind Systems A/S (VWS): 7.23%
  4. Gamesa Corporacion Tecnologica, S.A. (GAM): 6.52%
  5. REpower Systems AG (RPW):  6.22%
  6. China Longyuan Power Group Corp Ltd. (CLPXF):  5.54%
  7. China WindPower Group Ltd. (CWPWF): 3.91%
  8. Infigen Energy (IFGNF.PK):  3.56%
  9. Nordex AG (NDX1): 3.43%
  10. Hansen Transmissions International NV (HSN): 3.20%

 

PWND (PowerShares Global Wind Energy ETF) 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 $24M which is usually the threshold for reasonable coverage. Average daily trading volume is just under 15K shares. As of June 2011 the annual dividend was $.07 making the yield .69% and YTD return was 1.02%.

Data as of 2011-06-03

PWND Top Ten Holdings

  1. Enel Green Power S.P.A. (EGPW):  10.91%
  2. China Longyuan Power Group Corp Ltd. (CLPXF): 10.40%
  3. Iberdrola Energias Renovables SA (IBR):  10.00%
  4. Vestas Wind Systems A/S (VWS):  9.60%
  5. EDF Energies Nouvelles (EEN):  4.85%
  6. Innergex Renewable Energy, Inc. (INE):  4.82%
  7. REpower Systems AG (RPW): 4.65%
  8. EDP Renovaveis SA (EDPR):  4.40%
  9. Nordex AG (NDX1):  3.80%
  10. Gamesa Corporacion Tecnologica, S.A. (GAM):  3.73%

 

NLR (Market Vectors Uranium + Nuclear Energy ETF) follows the DAXglobal Nuclear Energy Index. The fund was launched August 2007. The expense ratio is .57%. AUM are now $242M and average daily trading volume at 112K shares. As of June 2011 the annual dividend is $1.06 making the yield 4.87% which is the highest in the space. YTD return was -13.81% which of course is occasioned by Japan's Fukushima plant disaster. Investors should remember while new nuclear plants will be difficult to permit ongoing servicing and construction of new plants will continue.

Data as of June 2011

NLR Top Ten Holdings & Weightings

  1. Constellation Energy Group, Inc. (CEG):  10.81%
  2. Mitsubishi Heavy Industries, Ltd. (7011):  10.44%
  3. Electricité de France (EDF):  9.14%
  4. Exelon Corporation (EXC):  9.10%
  5. Cameco Corp (CCJ):  7.33%
  6. Areva (CEI):  4.86%
  7. JGC Corp. (1963):  4.45%
  8. USEC Inc. (USU):  4.18%
  9. Uranium Participation Corporation (URPTF):  4.16%
  10. Paladin Energy Ltd. (PDN):  3.90%

 

Energy overall remains a primary focus for investors and alternative energy sources are also much in demand. While their success seems a necessity for society the problem is solutions and implementation is far in the future. This has made short to intermediate positive returns elusive as clearly investors have done better with more traditional carbon based choices. Someday there could be a breakthrough that would stimulate more investment but for now, it's a waiting game. 

For further information about portfolio structures using this or other ETFs see www.etfdigest.com .

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

 

(Source for holding data is from ETF Database and from various sponsors.)

 
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.