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.
"...so the opportunities within this sector will keep growing."
And that assessment is based on what evidence?
Posted by: Dave in VA | Mar 28, 2008 5:09:30 AM
Hi Dave,
There are several factors that will contribute to growth in the clean energy sector. Increasing concern about global warming and the rising cost of other means of energy is leading to a surge in solar companies.
One example is Southern California Edison, which announced plans to install 250 megawatts of solar energy on commercial rooftops over the next five years. The solar market is predicted to grow to 450 megawatts this year, with a majority of the demand in California.
Posted by: Tom Lydon | Mar 28, 2008 8:50:06 AM
I would like to see an ETF that invests in large engrg/construction companies,like MDR, CBI, FLR, etc.
These companies have large backlogs of contracts, world-wide.
Do you know of such an ETF?
Posted by: Craig Waddle | Mar 28, 2008 5:00:32 PM