Wind Energy ETF Puffs Up

July 26th at 2:09pm by Paul Weisbruch, Street One Financial

In yesterday’s piece we spoke about the recent momentum that Clean Energy/Alternative Energy ETF names have had this summer, and the flagging performance of Coal related equities and the linked ETF KOL (Market Vectors Coal, Expense Ratio 0.59%).

One of those Clean Energy ETFs that we should talk more about and have covered in this piece in the past is FAN (First Trust ISE Global Wind Energy Index, Expense Ratio 0.60%).

The fund has sprung to life recently in terms of trading activity, with more than 1 million shares changing hands on Wednesday alone (ADV is approximately 36,000 shares).

Related asset flows in FAN following this uptick in trading activity have yet to occur (the fund has pulled in a net of about $8 million YTD), but we will The fund zeroes in on companies that are involved in the wind energy industry, with top holdings currently looking like the following: Vestas Wind Systems (12.05%), Gamesa Corporacion Tecnologica SA (9.92%), Nordex AG (9.31%), China Longyuan Power Group Ltd. (8.55%), and Iberdrola SA (6.26%).

The fund is heavily slanted to international names making up about 89% of the overall index, with U.S. based companies making up the remaining 11%.

As one might expect, underlying sectors that operate in the Wind Energy space predominantly Utilities and Industrials, making up 53.47% and 43.03% of the overall index.

FAN remains a somewhat small ETF, with shy of $30 million in assets under management, but the recent spurt in activity is worth noting, especially given the acceleration in activity in the broader Clean/Alternative Energy sub-sectors.

The fund has been exceptionally volatile, bottoming in the $5 range last summer, before its impressive rally for much of 2013 where it is now trading well above $9.

First Trust ISE Global Wind Energy Index

For more information on Street One ETF research and ETF trade execution/liquidity services, contact Paul Weisbruch at pweisbruch@streetonefinancial.com.

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