Clean Energy ETFs Cleaned up in 2013
December 30th at 7:00am by Tom Lydon
The strength of alternative energy exchange traded funds in 2013 warrants being placed into context. Not only are four of the 10 best, including the top three, sector funds this year alternative energy plays, but those four occupy half the spots among the top eight non-leveraged ETFs of any stripe.
Most of the attention has been focused on the Guggenheim Solar ETF (NYSEArca: TAN) and the Market Vectors Solar Energy ETF (NYSEArca: KWT). After several years of forgettable performances and reverse splits along the way, TAN has more than doubled this year and rival KWT is close to a double. The pair are the two best non-leveraged ETFs this year. [Solar ETFs Look for 2014 Sequel]
Solar ETFs are not the only alternative energy funds worthy of praise. The Market Vectors Global Alternative Energy ETF (NYSEArca: GEX) ranks as the third-best non-leveraged ETF with a year-to-date gain of nearly 70%. GEX has benefited from its exposure to non-solar stocks.
“High-flying Tesla (NasdaqGM: TSLA), captained by Elon Musk, rose more than fourfold as a top holding in the Market Vectors Global Alternative Energy ETF. So is Cree (NasdaqGM: CREE) which makes LED lighting products. The stock soared 83% this year and stands to benefit from more mandatory phase-outs of incandescent bulbs in the U.S., analysts say,” reports Chris Dieterich for the Wall Street Journal.
Tesla and Cree combine for 18.6% of GEX’s weight. As the Journal notes, Danish wind turbine maker Vestas has surged 400% this year. That stock is GEX’s fourth-largest holding with a weight of almost 7.4%. [Why Clean Energy ETFs are Soaring]
Speaking of wind power, the First Trust Global Wind Energy Fund (NYSEArca: FAN) has soared 63.4% this year. Vestas is FAN’s largest holding at a weight of 7.8%. First Trust also sponsors another high-flying alternative energy ETF, the First Trust NASDAQ Clean Edge Green Energy Index Fund (NasdaqGS: QCLN).
QCLN is something of an “Elon Musk ETF” as Tesla and SolarCity (NasdaqGM: SCTY) combine for 12.4% of the fund’s weight. QCLN also has an 8.5% weight to Cree. [This is the Elon Musk ETF]
QCLN is up 26% in just the past six months. The Powershares Wilderhill Clean Energy Portfolio (NYSEArca: PBW) is another alternative energy ETF to keep an eye on in 2014 as that fund has a 2013 gain of over 58%. SolarCity and Tesla combine for 5.1% of PBW’s weight.
Market Vectors Global Alternative Energy ETF
ETF Trends editorial team contributed to this post.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Mr. Lydon serves as an independent trustee of certain mutual funds and ETFs that are managed by Guggenheim Investments; however, any opinions or forecasts expressed herein are solely those of Mr. Lydon and not those of Guggenheim Funds, Guggenheim Investments, Guggenheim Specialized Products, LLC or any of their affiliates. 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.