ETF Spotlight: Global Warming

November 5th at 2:31pm by Tom Lydon

ETF Spotlight on the ELEMENTS Credit Suisse Global Warming ETN (NYSEArca: GWO), part of an ongoing series.

Assets: $0.8 million.

Objective: The ELEMENTS Linked to the Credit Suisse Global Warming Index fund is based on the performance of the Credit Suisse Global Warming Index, Exchange Series, which is an equally weighted index of 50 companies that focus on products or services related to minimizing global warming.

Holdings: The ETN includes global companies that provide solutions for efficient energy consumption, limit CO2 production through nuclear energy, generate electricity from renewable sources and create bio-fuels and fuel-cells.

The Latest News:

  • New York City Mayor Michael Bloomberg has endorsed President Barack Obama on climate change in the wake of the devastating Hurricane Sandy.
  • “President Barack Obama has taken major steps to reduce our carbon consumption, including setting higher fuel-efficiency standards for cars and trucks,” the Mayor wrote in Bloomberg.
  • “Mitt Romney, too, has a history of tackling climate change,” Bloomberg added, “but since then, he has reversed course, abandoning the very cap-and-trade program he once supported.”
  • Globally, extreme weather events are increasing, and “nowhere in the world is the rising number of natural catastrophes more evident than in North America,” reinsurance company Munich Re said, Bloomberg reports.
  • “Climate change amps up other basic factors that contribute to big storms,” according to Mark Fischetti of Scientific American. “For example, the oceans have warmed, providing more energy for storms. And the Earth’s atmosphere has warmed, so it retains more moisture, which is drawn into storms and is then dumped on us.”

What You Should Know:

  • ELEMETNS sponsors the fund.
  • GWO has a 0.75% expense ratio.
  • Regional breakdown includes U.S. 25%, continental Europe 37%, UK/Ireland 8%, Japan 15%, Non-Japan Asia 10% and the rest of the world 5%.
  • GWO is an exchange traded note.
  • ETNs are essentially an uncollateralized loan to an investment bank and leaves investors open to potential credit risks of the issuing bank – if the bank goes under, there is no guarantee that the ETN investor will receive all of his or her principle back. [Exchange Traded Notes]

ELEMETNS Global Warming ETN

For past stories in this series, visit our ETF Spotlight category.

Max Chen contributed to this article.

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.

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