The Clean Energy Sector ETFs Readjust, But the Long-Term Potential Is There

Clean energy stocks and exchange traded funds (ETFs) were last year’s little darlings for the market, outperforming in big ways.

This year, things are much different, reports Billy Fisher for The Street. But Jenny Chase, senior solar analyst for New Energy Finance, believes that solar stocks are good, long-term prospects, although some volatility is to be expected. ETFs are one of the best ways to invest in these stocks because picking winners among these companies is difficult at this stage. 

• PowerShares WilderHill Clean Energy Fund (PBW) down 27.3% year-to-date
• PowerShares Global Clean Energy Fund (PBD) down 20.5% year-to-date
• Market Vectors Global Alternative Energy (GEX) down 22.7% year-to-date

In comparison, the S&P is down 11.6% over the same period. One of the primary problems facing clean energy companies is cost competitiveness. Solar, however, is getting more refined over time, so the opportunities within this sector will keep growing.

Another factor is the general downturn in the markets overall – many funds have had a hard time of it, and investors are simply viewing the green sector as they would most others.