Solar ETFs Glimmer With The Help Of High Oil Prices

Solar exchange traded funds (ETFs) appear to be basking in the sun as ever-rising energy prices are sending people looking for less expensive alternatives.

Two companies of interest are JA Solar (JASO) and Evergreen Solar (ESLR) who have experienced high first-quarter earnings. Market Vectors Solar (KWT) and Claymore/MAC Global Solar Energy (TAN) are up 7.7% and 9.5% respectively so far this week, reports Rob Wherry for Smart Money.

Both funds are still new kids on the block: KWT was launched on April 23, and it's up 4.6% since then. TAN was the first solar ETF available, launching on April 15. Since then, it's up 10.9%.

Will the flood of investors driven to solar continue, even if oil prices retreat? Time will tell. Oil futures fell today, settling at $122.20 a barrel. It's the weakest level since May 8, say Myra P. Saefong and Polya Lesova for Market Watch. Natural gas prices also fell by 3% after a bigger-than-expected jump in supplies was reported.

Green ETF Marketplace In a Growth Spurt

When it comes to exchange traded funds(ETFs), is it in style to be green?

The clean energy market is growing faster than ever, and fund companies are right on the  money, launching so-called green funds. Some say that being green means being too narrow, too focused and just plain volatile.

Claymore S&P Global Water Fund (CGW) has been criticized for being too focused on small companies within a narrow sector. The fund is down 5.3% year-to-date. Likewise, the solar energy ETFs that have hit the market can also take the narrow path, with both the Claymore/Mac Global Solar Energy Index (TAN) and the Market Vectors Solar Energy (KWT) offering similar solar exposure, with the same expense ratios.

As Gary Gordon on ETF Expert  points out that, by definition, a sector fund is supposed to be concentrated. And as the awareness grows, the number and selection of funds will, too. That's the beauty of ETFs - you can pick and choose what works for you. It's been a rough year so far for this sector, but many are feeling optimistic about the long-term prospects as concern about global warming gathers steam.

Just be sure not to have your portfolio overweight in a particular sector, and always keep an eye on those areas that are performing. Protect yourself by not getting in until the 200-day moving average has been crossed and get back out when it drops below that line or 8% off its high.

Other green ETFs include:

• First Trust NASDAQ Clean Edge (QCLN), down 23.7% year-to-date
• Market Vectors Environmental Services (EVX), up 0.4% year-to-date

Take Off Your Shades And Look Directly At The Solar ETFs

The recent rise in energy consciousness has given way to more solar energy-focused exchange traded funds (ETFs).

The latest slew of funds invest in specific technologies, and Matthew Hougan for Index Universe analyzes the two ETFs providing access to the solar market.

Claymore/MAC Global Solar Energy Index (TAN) and the Market Vectors Solar Energy (KWT) tout the same expense ratios at 0.65% and offer global solar energy exposure.

Both indexes aim to proved global exposure to the solar energy market. They were also constructed with "screens": TAN requires components to generate at least one-third of their income from the solar industry. Companies that generate more than 66% of their revenues from solar are weighted at their full market cap. Companies between 33% and 66% are weighted at half their market cap.

KWT tracks the Ardour Index and takes a simpler approach. Companies must generate 66% of their revenue from solar energy to be included at all. KWT's components are all pure plays.

There's no way to tell which fund will ultimately do better, though, and the case could be argued either way. In a fund made entirely of pure plays, those companies could lose out to larger conglomerates. It could be more sensitive to changes in solar, making the potential for returns (and losses) greater. TAN could be less volatile, with broader exposure and more upside potential.

Is It Hot In Here, or Is It Just Solar ETFs? (Updated)

A software glitch at the American Stock Exchange held up the launch of the newest solar exchange traded fund (ETF) today.

When it does launch, the Market Vectors Solar Energy (KWT) will the Claymore/MAC Global Solar Energy Index (TAN) as the only two pure plays on the fast-growing sector. 

KWT is based on the Ardour Solar Energy Index (SOLRX), which has worldwide exposure to 26 companies that derive at least 66% of their revenues from solar energy. The fund comes with an expense ratio of 0.65%. The fund is most heavily weighted in Germany, with 36.7% of its assets allocated there. China is second, with 24.3% of assets.

TAN has 25 components, with 25% of them based in the United States. The fund also has an expense ratio of 0.65%.

Solar energy accounts for less than 1% of global electricity, so the sector has plenty of room for growth.

Party on Earth Day With ETFs

There are numerous ways one can celebrate Earth Day: take out the recycling, turn off the lights, carpool to work or buy green exchange traded funds (ETFs).

After all, ETFs don't emit anything, so you don't even have to feel guilty about being a polluter.

While the sector has taken a hit along with the rest of the market in recent months, many experts encourage investors to take a long view when it comes to these funds. The United States is still in the early stages of solar energy development, and an interest in alternative fuels could increase if the cost of oil and gas keep up the way they have been.

Some experts accuse many companies of "greenwashing"; that is, making claims the make consumers think they're more environmentally responsible than they actually are. Luckily, consumers are catching on, CNBC reports. In Britain and Australia, there are already hefty fines that come along with false claims.

The Federal Trade Commission (FTC) is currently reviewing its own environmental marketing standards. Terra Choice lists the six greenwashing sins.

There are a number of green ETFs to choose from, so take your pick. And remember to turn out the lights.

A few of them:

• PowerShares WilderHill Clean Energy (PBW), down 20.7% year-to-date
• PowerShares Global Clean Energy (PBD), down 12.2% year-to-date
• Market Vectors Global Alternative Energy (GEX), down 10.5% year-to-date
• First Trust NASDAQ Clean Edge US Liquid (QCLN), down 21.5% year-to-date
• PowerShares Cleantech Portfolio (PZD), down 5.8% year-to-date
• Claymore Global Solar Energy (TAN), up 4.4% since April 15 inception

Will the Pope Bless These ETFs?

The pope's visit got us to thinking about exchange traded funds (ETFs) that invest with Catholic values in mind.

Why go socially responsible? If, for example, you're anti-smoking, would you feel comfortable holding stock for a tobacco producer in your fund and profiting from those things you don't believe in?

Boycotting the stock of such companies can eventually have an impact on those companies, too, if enough investors feel the way you do, says Michael Bluejay. If no one wants the stock, the price will go down.

There currently are no such ETFs that invest with a lean toward Catholic ideals, but there is a line of mutual funds:

• Ave Maria Catholic Values Fund (AVEMX), which is the largest Catholic fund at $130 million in assets
• Ave Maria Growth Fund (AVEGX)
• Ave Maria Bond Fund (AVEFX)
• Aquinas Small-Cap Fund (AQBLX)
• Aquinas Growth Fund (AQEGX)

George Schwartz, an investment advisor for Ave Maria, says most socially responsible funds are geared toward such things as environmentally friendly companies or those companies with a certain number of women on their boards, reports William Baue for Social Funds.

Ave Maria Funds screen out companies that contribute to Planned Parenthood, deal with pornography and those companies that offer non-marital partner benefits.

Whatever your investment philosophy, a list of socially responsible mutual funds of all types can be found at Social Funds.

While there aren't any U.S.-listed religion-based ETFs yet, there are indexes based on certain religions. Dow Jones launched its first Dharmic religious indexes earlier this year, Index Universe reported on Seeking Alpha. They target members of the Dharmic religious: Hinduism, Buddhism, Jainism and Sikhism. Dow Jones also offers the Dow Jones Islamic Indexes.

Just In Time for Warm Weather, Claymore Launches Solar ETF

While there are several clean energy exchange traded funds (ETFs) out there, none of them have focused solely on one aspect of the sector until now.

Claymore this morning launched the Claymore/MAC Global Solar Energy Index (TAN) on the NYSE Arca. Claymore President Christian Magoon told us the potential for growth in the solar industry is huge. Currently, it accounts for less than 1% of global electricity.

Biofuels Responsible for Higher Food Prices and Agriculture ETFs?

Once hailed as something that could help reverse global warming, biofuels are now being blamed for much of the high cost of food and the resulting strong performance of agriculture exchange traded funds (ETFs).

World Bank President Robert Zoellick says biofuels are a "significant contributor" to the prices. That, couples with droughts, financial market speculators and increased demand have created a perfect storm, according to a report on NPR's Morning Edition.

A 4.4-lb. bag of rice in Bangladesh eats up half the daily income of a poor family, Zoellick said. In Haiti, where most people live on less than $2 a day, riots protesting the rising cost of living there are threatening the stability of the country, reports Jonathan M. Katz for the Associated Press.

Staples aren't likely to get cheaper anytime soon, either. He said that since Europe and the United States have stepped up their biofuel production, it's going to keep prices high for the next couple of years.

One of the few good points about skyrocketing food prices is that they could benefit agriculture-focused ETFs:

• PowerShares DB Agriculture (DBA): up 18.7% year-to-date
• Market Vectors Global Agribusiness (MOO): up 2.5% year-to-date
• iPath Dow Jones Agriculture (JJA): up 11.4% year-to-date

As long as biofuels exist, there are a number of green and alternative energy ETFs around that can capture the sector, including:

• PowerShares Cleantech Portfolio (PZD)
• Van Eck Market Vectors Environmental Services (EVX)
• First Trust NASDAQ Clean Edge (QCLN)

New ETN Focuses on Platinum, Palladium

Investors who have been looking for access to platinum and palladium via an exchange traded product finally can have it with the ELEMENTS MLCX Precious Metals Index (PMY) exchange traded note (ETN), listed on NYSE Euronext.

The fund follows the MLCX Precious Metals Index, which provides a benchmark for the precious metals sector, including gold, silver, platinum and palladium. Platinum and its rising price, in particular, have generated much interest among investors. For reasons of liquidity, it's unlikely the United States will have an exchange traded fund (ETF) that would hold futures for the rare metal. It's in such short supply that the potential is there for investors to dictate and control the market, says Kevin Rich, CEO of DB Commodity Services.

ELEMENTS has also listed the ELEMENTS Credit Suisse Global Warming Index ETN (GWO), which offers exposure to the stocks of companies that have increased focus on products and services related to easing the effects of global warming.

ETFs and ETNs are cousins, but they operate in different ways: ETNs are debt securities with a stated maturity date. With them, an investor is assuming market risk along with the risk that the ETN's issuer might not be able to pay up when the time comes.

These ETNs join a growing list of exchange traded products that offer exposure to commodities and target the "green" sector, including:

• First Trust NASDAQ Clean Edge (QCLN)
• PowerShares Cleantech Portfolio (PZD)
• Market Vectors Environmental Services (EVX)
• streetTRACKS Gold Shares (GLD)
• iShares Silver Trust (SLV)

The Sun Is a Mass of Incandescent Gas, Powering Green ETFs

The markets were more or less quiet yesterday, but solar energy stocks clung to the gains they made and brought the struggling green exchange traded funds (ETFs) up with them.

It's been a tough year so far for the funds. The First Trust Nasdaq Clean Edge U.S. Liquid Series (QCLN) rose the most yesterday, by 4%. It's climbed 22% from its 52-week low, but it remains 27% below its high, reports Trang Ho for Investor's Business Daily.

PowerShares WilderHill Clean Energy (PBW) shot up 4.1% yesterday. It's down 24.2% year-to-date. The newest fund in the bunch, Market Vectors Global Alternative Energy (GEX), rose 2.6% yesterday, but it's down 16.8% year-to-date.

It's generally agreed that solar energy has a home in most portfolios. As the cost of energy rises and education about global warming spreads, interest in solar power will rise. Of course, if the price of oil tapers off, so will the interest in this sector, which makes it a volatile one.

New Carbon Emissions Indexes Join Clean Energy ETFs

The green mentality has prompted Merrill Lynch to roll out a set of indexes focused on carbon emissions credits, in the hopes that someday an exchange traded fund (ETF) or exchange traded note (ETF) will track them.

Jesse Emspak for Investor's Business Daily reports that the indexes track the value of carbon emissions credits. In the European Union, companies are given credits that can be traded in a way that's similar to futures and options. Buying more means a company can emit more, whereas buying less means emitting less.

The base index is the MLCX Global CO2 Emissions Index. It tracks emissions under the European Union's emissions trading scheme and the Kyoto Protocol.

XShares Advisors also have an ETF in registration called AirShares. It will track carbon credits trading in Europe, but there's no word as to when it will begin trading.

Green and clean energy ETFs performed well last year, but have had a rough time year-to-date, but some experts believe that the prospects for the sector are good and recommend investors take a long-term view when it comes to these vehicles.

Green ETFs already in the game:

• PowerShares WilderHill Clean Energy (PBW), down 27.2% year-to-date
• PowerShares Global Clean Energy (PBD), down 17% year-to-date
• Market Vectors Global Alternative Energy (GEX),  down 18.9% year-to-date

Solar, Clean Energy ETF Investors Need to Take Long View

There are two new exchange traded funds (ETFs) in registration that offer exposure to a fast-growing area of the clean energy market. 

Van Eck and Claymore are in line to offer solar energy ETFs. Claymore's Global Solar Energy ETF will track the Melvin & Company index of 25 stocks that are selected based on the  importance of solar energy within the company's business model.

Seeking Alpha Hard Assets Investor reports that Van Eck Market Vectors-Solar Energy ETF will track the Ardour Solar Energy Index. The index is composed of 25 stocks selected based on market cap, liquidity and revenue. The fund is expected to launch this month. Investor interest in solar is strong, giving the solar and clean tech sector a positive outlook over the long haul after once being considered fringe players.

Smart Money's Rob Wherry adds that these funds are joining the ranks of PowerShares WilderHill Clean Energy (PBW), PowerShares Global Clean Energy (PBD) and Market Vectors Global Alternative Energy (GEX). These types of ETFs have sputtered so far this year, with the funds down 28%, 19%, and 21%, respectively.

Consider that the United States is still in the early stages of solar interest and development. But as the cost of more traditional energy rises, this sector is likely to continue generating interest.

Consider these points in a Scientific American article by Ken Zweibel, James Mason and Vasilis Fthenakis:

• A massive switch to solar power plants could supply 69% of the United States' electricity and 35% of its total energy by 2050.
• $420 billion in subsidies from 2011 to 2050 would be required to fund the infrastructure and make solar power cost-competitive.
• The energy of the sun striking the earth is powerful: 40 minutes of sunlight is equivalent to global energy consumption for an entire year.

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.

Clean Energy ETFs Falter; Green Investing on Hold

While clean energy exchange traded funds (ETFs) may have gotten socked hard in the recent market correction, it doesn't mean the fad is over. Most sectors are taking a hit these days, and alternative energy is no exception.

The clean energy sector got ahead of itself, green advocates say. Last year, for example, WilderHill Clean Energy Global Innovation Index was up 58% while the S&P 500 gained 3.5%.

In January's sell-off, the S&P was down 6% while the WilderHill index was down 20%, says Dan Jamieson for InvestmentNews.

Robert Wilder, the founder of WilderShares LLC and manager of the indexes, says areas such as solar power may have been bid up. They rose a whopping 163% last year.

One analyst says that people will support clean energy until the cost goes up too much, and that the promise of the sector is more talk than reality at this point.

Despite the sell-off alternative energy practices will not go by the wayside, even if oil prices fall. New energy technologies will be driven by the need to preserve the environment and energy security and it's the beginning of a trend. The way power is produced is undergoing a transformation.

If you're ready to think about green ETFs, here are a few to look at:

• First Trust NASDAQ Clean Edge US Liquid (QCLN), down 33.6% year-to-date
• PowerShares Cleantech Portfolio (PZD), down 15.2% year-to-date
• PowerShares WilderHill Clean Energy Portfolio (PBD), down 21.6% year-to-date
• Market Vectors Global Alternative Energy (GEX), down 25.6% year-to-date

Just bear in mind, green ETFs have been popular, but when it comes down to it, investors are going to look at them like they've been looking at other investments lately.

Looking Under the Hood of Alternative Energy ETFs

  Alternative energy is the thing, even in the exchange traded fund (ETF) arena. It's so in right now, in fact, the venture capitalists have poured a record amount of money into the business.

In a report issued by Dow Jones VentureSource, venture capitalists put $3 billion into alternative energy in 2007 - much if it toward products still in development.

Murray Coleman for Index Universe wonders how much room should be allocated to this sector in one's portfolio, or if they should even be there at all.

Energy overall is down this year. PowerShares WilderHill Clean Energy (PBW) gained 59.7% last year, but year-to-date, it's down 26.1%. Top holdings, though, include Cree Inc. (CREE, 4.6%) and Applied Materials (AMAT, 4%). Both computer manufacturers that are performing well this year. But do they really fall under the "alternative energy" umbrella?

It's a good argument for doing some homework, knowing what you own and making sure that a fund you've chosen aligns with your personal objectives.

Clean Energy ETF Will Bask In Solar Power

Clean energy exchange traded funds (ETFs) may see sunny days as First Solar Inc. (FSLR) got a thumbs up for revenue increases from analysts.

Analysts raised their estimates for the solar panel maker, saying the company will continue to post revenue growth from lowered costs and manufacturing improvements, reports the Associated Press.

PowerShares WilderHill Clean Energy (PBW) holds 3.32% of First Solar. The expected revenue growths could set the ETF up for an increase. It could use the lift because it's down 21.7% year-to-date.

First Solar's stronger-than-expected fourth quarter surprised Wall Street, giving 2008 revenue forecasts a jump as well. Expectations are for sales to double this year. In the last year, First Solar's stock has risen 345%.

If It's Clinton Or Obama, These ETFs Might Benefit

Now it's time for the flip-side: What exchange traded funds (ETFs) stand to gain from a Democrat (that will be either Barack Obama or Hillary Clinton at this point) occupying the White House?

If Obama wins, says Kevin Baker for The Street, his website calls for $150 billion over ten years to be invested in clean energy technologies. He wants advances in biofuels, plug-in hybrids and an increase in the research of solar and wind power.

Clinton also has marked clean energy as a priority. She wants to reduce greenhouse gas emissions by 80% and cut foreign oil imports, and like Obama, she wants to increase the investment in energy research and development.

With priorities like those, a fund such as the PowerShares WilderHill Clean Energy Portfolio (PBW) could almost certainly benefit. One-third of the ETF is invested in alternative-energy stocks. Market Vectors Global Alternative Energy (GEX) might benefit in a Democratic administration, as well.

Another centerpiece of both the Clinton and Obama campaigns is health care reform. Obama wants to force price cuts in the industry, but without mandating that everyone be covered. Clinton, on the other hand, wants every man, woman and child insured.

The iShares Dow Jones US Insurance Index Fund (IAK) might do well in a Clinton White House, but fare poorly in an Obama one.

If Clinton is the nominee, the Consumer Discretionary Select Sector SPDR (XLY) could be worth a look. That's because her nomination could inspire Republicans to dig deep and donate big toward political commercials. Almost a third of the fund is invested in media companies.

Another fund worth a look if Obama wins the White House is the PowerShares Dynamic Building & Construction (PKB). His plan calls for more spending on roads, bridges and schools. Since this fund is 30% allocated in engineering and construction, it could reap the rewards.

Will Paper's Push Out the Door Impact the Timber ETF?

The desire for efficiency and reducing consumption is leaving paper in the dust, but could the use of the wood derivative someday slow down enough to impact the timber-focused exchange traded fund (ETF)?

The need for finding exactly what you want the moment you think of it has driven the age of digital scanners into the here and now. Household paper products such as phone books, lists, letters and calendars have become entirely digital in some homes. But the motive isn't entirely based on environmental issues. Most people just want more efficiency, reports  Hannah Fairfield for The New York Times.

Inexpensive document-fed scanners, multiple computers, digital cameras and electronic book readers are causing paper to be put onto the endangered species list. A paperless world is good for the trees, but it isn't necessarily a boon for the environment because there are other less positive side effects.

In the world's richest countries, while paper consumption has dropped 6% between 2000 and 2005, the use of energy has increased. Many of the devices that make a paperless world possible gobble up power when they're in use, plugged in or recharging.

Reducing paper use, however you cut it, puts less pressure on the world's trees and timber. Claymore/Clear Global Timber Index (CUT) is down 13% year-to-date.

Graphic courtesy of the New York Times

G-7 Summit Keeps Financial Market Hopeful

The G7 Summit meeting takes place this weekend and we'll have to wait and see what effect decisions made there will have on the economy and exchange traded funds (ETFs).

The dollar was slightly weaker while holding onto recent gains made earlier in the week while investors awaited the meeting, where finance leaders from the world's most industrialized nations get together, according to Dan Molinski for The Wall Street Journal.

Topics of interest at the Summit meeting:

• how to handle recent financial market turmoil
• health of the U.S. economy
• necessary steps to ensure sustained growth in the U.S.

G-7 financial leaders are, in particular, seeking to calm credit fears. Discussions will be about how to disclose and enhance finance-related information by institutions along with how to compensate for losses caused by the U.S. home loan crisis, reports DPA for EarthTimes.

Nations must work together to keep the global economies growing and to stabilize the financial markets. Climate change will be discussed in Hokkaido at the Group of Eight summit.

Meanwhile, finance minsters of Britain, Japan and the U.S. asked officials from other countries to join in an initiative to help developing nations cut greenhouse emissions through clean-energy technologies. The World Bank reports that by pooling efforts to support a new clean technology fund, administered by The World Bank, developing nations can cut their emissions.

Several ETFs could feel the impact of decisions made at the meeting:

• Financial Select Sector SPDR (XLF)

• iShares Dow Jones US Financial Services (IYG)

• PowerShares Global Clean Energy (PBD)

• PowerShares Wilderhill Clean Energy (PBW)

Indexing and ETFs Get a Fresh Perspective in Outsider's Report

The indexing and exchange traded fund (ETF) industry recently was privy to the observations of an outside observer.

Adam Sussman, a senior analyst for the TABB Group, wrote an exhaustive report titled "Performance Anxiety: A Buy-Side Study on Benchmarks and the Investment Process." You can buy it for $8,000 - or just read summary here for the bargain price of free.

Heather Bell for Index Universe sorted out the report's 38 pages so you don't have to and highlighted some of its most illuminating findings:

• Index providers could gain more market share by differentiating their indexes with better services and more information.

• Index subscribers want more data accuracy, and they want information on things like dividends, mergers and acquisitions and stock buybacks.

• Index providers can compete in the area of analytics. Sussman cites MSCI's acquisition of Barra, along with S&P's acquisition of CariFI. Having the analytics in-house could be a big selling point for a provider.

• By 2009, nearly 70% of all pension plans will use customized benchmarks.

• Customized benchmarks also will be driven by socially responsible investing, since more restrictions are being placed on pension funds in regard to where they can invest.

The overall conclusion of the report? Benchmarks once were an afterthought, and now they are front and center. Indexing has opened, and will continue to open, new doors.

No Easier Way to Go Green Than With ETFs

It might not be easy being green, as Kermit so prophetically sang, but exchange traded funds (ETFs) make it a lot easier to do so when your locality isn't.

Felicity Barringer for the New York Times says that while in Arlington, VA, green might be the ultimate goal, there are still roadblocks: budget constraints, legal restrictions and people's unwillingness to change.

Arlington isn't the only city trying to get over the hurdles, either. One Rhode Island mayor says that energy efficiency requires a whole new infrastructure to evaluate and measure. People in other cities want to help reduce their carbon footprint, but feel like they can't afford the upgrades to energy efficient appliances or lights. Getting people out of their cars is proving to be a big challenge, as well.

What's not a challenge is green ETFs. If you can't afford to plunk down a few hundred for an energy efficient washer, dryer or dishwasher, you don't necessarily have to sit out the green movement. On top of all the small, affordable things you can do - recycling, reducing your water consumption, turning off lights and appliances that aren't in use - looking at green ETFs is one of them.

• PowerShares WilderHill Clean Energy (PBW)
• PowerShares Cleantech (PZD)
• First Trust NASDAQ Clean Edge U.S. Liquid (QCLN)
• Market Vectors Global Alternative Energy (GEX)

Claymore 'Acts Responsibly' and Closes 11 ETFs

After three years of billions of dollars flowing into exchange traded funds (ETFs) and hundreds being launched, one ETF provider is showing their accountability and trimming the hedges.

Following a recommendation and approval from their board of directors, Claymore today filed with the SEC to close 11 of their 37 ETFs. I spoke with Christian Magoon, the head of Claymore's ETF Group, who explained that Claymore felt they have a duty to all shareholders and if some ETFs are not widely accepted in the marketplace, it's Claymore's responsibility to act.

The closing funds represent less than 2% of the firm's U.S. ETF assets. View the press release here. The last trading day for the following funds will be February 19:

• Claymore/BIR Leaders 50 (BST)
  
• Claymore/BIR Leaders Mid-Cap Value (BMV)
  
• Claymore/BIR Leaders Small-Cap Core (BES)
  
• Claymore/Robeco Boston Partners Large-Cap Value (CLV)
  
• Claymore/LGA Green (GRN)
  
• Claymore/KLD Sudan Free Large-Cap Core (KSF)
  
• Claymore/Clear Mid-Cap Growth Index (MCG)
  
• Claymore/Zacks Growth & Income Index (CZG)
  
• Claymore/IndexIQ Small-Cap Value (SCV)
  
• Claymore/Robeco Developed World Equity (EEW)
  
• Claymore/Clear Global Vaccine Index (JNR)

Some ETF naysayers may have been waiting for something like this and may jump all over the news as a sign that the ETF industry has been fat, dumb and happy for too long. In reality, this is probably the kind of move that the conventional mutual fund industry should have made years ago.

Will An ETF Soon Follow a Global Warming Index?

Global warming is becoming an issue that few can ignore, and perhaps an exchange traded fund (ETF) will soon be dedicated to tracking the issue.

The first step toward that is already on its way: investment bank UBS is set to unveil a derivatives index that will track the greenhouse effect, reports the Financial Times. The index is designed to follow along with the price of carbon emission credits and global temperatures - as those rise, so will the index.

According to the UBS website, the UBS Global Warming Index is primarily composed of weather monthly futures contracts in 15 U.S. cities. As that market grows, the index will likely add other non-U.S. cities.

Two New ETFs Will Track Coal and Gaming

The Securities and Exchange Commission (SEC) has cleared the way for two new exchange traded funds (ETFs) from Van Eck. The Market Vectors Coal (KOL), to be launched on the NYSE Arca, and Market Vectors Gaming (BJK), to be launched on the American Stock Exchange.

KOL will track an index of 60 companies involved in the mining or transportation of coal, manufacture of coal mining equipment and the production of clean coal. BJK will follow an index of 69 companies involved in the global gaming industry, including race track, sports and horse betting operations, online gaming and casinos.

The launch dates for these funds have not yet been released.

2007's Top ETF Performers

After all of the global expansion we saw throughout 2007, it's no big surprise that exchange traded funds (ETFs) tapping into those markets remained the strongest performers.

Why Not A Christmas ETF?

Although there are religious based indexes, there is yet to be an exchange traded fund (ETF) to track them. At this time of year it is easy to get caught up in a whirl of shopping frenzy, but underneath it all, Christmas is a religious holiday, celebrating the traditional birth of Jesus Christ. Christmas is an annual holiday celebrated on December 25th, and various secular customs are practiced by many.

The word Christmas implies Christ's Mass, and it is derived from Middle and Old English. So what does this have to do with ETFs? Not much yet, however, if a Christian-oriented fund abounded, it would be sure to do well at this time of year.

For now we have the iShares KLD Select Social Index (KLD) whose holdings are "socially responsible". iShares KLD 400 Social Index (DSI) is another, however the holdings are similar. Both include Proctor Gamble (PG), Johnson & Johnson (JNJ) and Microsoft (MSFT), to name a few.

Energy Bill's Reach Could Go Beyond Related ETFs

President Bush's signing of an energy bill will have implications beyond our fuel consumption and oil-related exchange traded funds (ETFs).

The law calls for an increase in vehicle fuel efficiency standards, more use of biofuels, such as ethanol, and more energy-efficient homes and appliances, reports Steve Hargreaves at CNNMoney.com. Refineries will be required to replace 36 billion gallons of gasoline with biofuel by 2022, and no more than 15 billion of those gallons can come from corn-based ethanol because of concerns about food prices.

The fuel industry is the most obvious industry that will be affected by the bill, but a ripple effect will likely be seen elsewhere as the changes are implemented. Automakers have long said that raising fuel economy standards would be costly. Will the bill drive up car prices as they feared? There is no auto ETF at the moment. And what will it do to the cost of air travel?

The cost of appliances could rise, too. But as socially conscious consumers replace their old appliances with new energy-efficient ones, it could increase spending. Increasing the use of corn-based ethanol could drive up the price of the commodity.

Some of the ETFs that could be affected by the bill include:

• PowerShares DB Agriculture (DBA), up 29.1% since January inception. Corn futures are 23.5% of the fund.
• U.S. Oil Fund (USO), up 39.8% year to date
• PowerShares Dynamic Oil and Gas Services (PXJ), up 33.7% year to date
• PowerShares WilderHill Clean Energy (PBW), up 52.4% year to date
• Energy Sector Select SPDR (XLE), up 30.5% year to date
• Dow Jones Transportation Index Fund (IYT), up 0.5% year to date

From Greed to Green ETFs

Exchange traded funds (ETFs) focusing on eco-consciousness are at the forefront right now. Jim Lowell for Forbes remarks that as long as the global economy keeps crude prices high, alternative energy has staying power. But beware-not all green ETFs invest in green companies. For example, Claymore/LGA Green ETF (GRN) holds companies such as AT&T (T) and Bank of America (BAC). 

Know what is under the hood, as different-sounding ETFs have the same holdings and overlapping occurs. For instance, PowerShares WilderHill Clean Energy (PBW) and PowerShares Cleantech (PZD) both give 15% allocations to Sunpower (SPWR) and take large positions in Cree (CREE).

While thinking about and supporting clean energy is good, abandoning traditional energy investment may not be so bad. Clean energy accounts for 6% of energy usage so consider that old fashioned energy stocks account for 10% of the S&P 500. Carbon-focused fuel is going to be a staple for some time longer.

There's More to Timber ETF Than Meets the Eye

Andrew Corn, in his own words, is known as “a bleeding heart, tree-hugging person in real life.” So, the founder and CEO of Clear Asset Management was a bit taken aback when a friend of his daughter’s called and, in a dramatic fashion that is the hallmark of 14-year-olds everywhere, asked him how he could possibly be a part of something called “CUT.”

That is, the Claymore/Clear Global Timber exchange traded fund (ETF). Its underlying index is made up of 27 companies from 11 countries that produce wood and paper products. And it has little to do with lumber and its price.

“The thing I have found is that people look at what we’re doing, and they wanted to take our information and compare it to the spot price of lumber in the Midwest. Why not compare the prices to a banana? There is that little correlation to lumber prices,” Corn says.

Green Holidays and Green ETFs

This holiday season, why not go green with your lifestyle; save green, live green, think green and invest green with exchange traded funds (ETFs)? David Bach for Automatic Millionaire suggests to start green traditions with family and friends. Traditions where lavish gifts, mountains of wrapping paper, and big after holiday bills are passe, and recycled decorations, gifts from the heart ,and money in your bank are in. Here are his nine tips:

1. Deck the halls with LEDs. These keep utility bills down and use less energy, and holiday lights can last an amazing 20 years.
2. Green gifts are best, such as recycled silver and gold, soy candles and shopping saves gas and a trip to the frenzied retail scene.
3. Wrap with recyclables such as Sunday comics, paper bags and maps. Household garbage increases 25% over the holidays so begin cutting yours down.
4. Send green greetings with virtual cards or 100% recycled paper cards.
5. Decorate with nature and for free!
6. Host an organic potluck dinner and donate leftovers to the needy.
7. Travel green - make sure your car is tuned up and your tires have enough air. This way you'll use less energy.
8. Go shopping in your closet and put together a holiday ensemble with your old clothes.
9. Spend time, not money. Don't fill your holidays with stuff-instead spend quality time with family and friends-not spending money.

And with all of that time and money you will save, invest some of it into a green ETF. Below are a few; Now go shopping!

• PowerShares Cleantech (PZD) 
• Market Vectors Environmental Services ETF (EVX) 
• Claymore/LGA Green ETF (GRN)
• PowerShares WilderHill Progressive Energy (PUW)
• PowerShares Global Clean Energy (PBD)
• First Trust NASDAQ Clean Edge U.S. Liquid ETF (QCLN)
• PowerShares Wilderhill Clean Energy (PBW)
• Market Vectors Global Alternative Energy ETF (GEX)

Some ETFs Stand to Benefit If America Deals With China's Evironmental Record

An environmental disaster in China - could this cause a conundrum for investors who want exchange traded funds (ETFs) that contain China while also wishing to support socially responsible countries and companies?

Carl Delfeld in Forbes lists some alarming facts about China's environmental record. Among them:

• It's the world leader in air and water pollution
• Sixteen of the world's most polluted cities are in China
• According to the World Wildlife Fund, it's the largest polluter of the Pacific Ocean
• Chinese experts believe that only about 10% of China's environmental laws are consistently enforced

China obviously has its work cut out for it. If American firms begin stepping in to help China address its environmental issues, a number of ETFs stand to benefit.

• PowerShares WilderHill Clean Energy Portfolio (PBW)
• PowerShares Cleantech (PZD)
• Market Vectors Environmental Services (EVX)
• Claymore/LGA Green (GRN)
• PowerShares WilderHill Progressive Energy (PUW)
• First Trust NASDAQ Clean Edge U.S. Liquid (QCLN)
• Market Vectors Nuclear Energy (NLR)

Ethical ETFs Are In the Eye of the Beholder

We're sure that ethical stances, just like statistics, can be spun any number of ways -- even when it comes to exchange traded funds (ETFs). For example, Dido Sandler of the Financial Times writes that there are those who might argue that agriculture and timber companies are ethical. After all, they have a hand in giving people food and shelter.

However you spin it, investors need to make sure that what they're investing in aligns with their own ethical standards. Some agricultural ETFs meet the criteria because crops are also used to produce biofuels. However, while biofuels are seen as an environmentally-friendly alternative, their advantages aren't very clear cut.

Many investors committed to investing in socially responsible ETFs steer clear of agricultural funds for a number of reasons: genetic modification, animal welfare and intensive farming.

All this pretty much means, as Sandler points out, if you want to invest "green," you'll probably need to develop some pretty broad ethical criteria.

Exxon Mobil Shifts To Clean Energy, Possible ETF Slot?

Exxon Mobil (XOM) energy company is planning to present new technology next month, possibly helping raise its shares and related exchange traded funds (ETFs). This new technology is aimed at improving the efficiency and affordability of electronic and hybrid vehicles, according to the Associated Press.

The company has co-developed new film technology with Japanese affiliate Tonen Chemical that would allow lithium-ion batteries to be used in cars. These are the same batteries used in cell phones and lap tops. The company is scheduled to unveil the technology the first week in December.

Could this new technology put Exxon Mobil closer to a slot in a clean energy ETF such as PowerShares WilderHill Clean Energy (PBW) or Claymore/LGA Green ETF (GRN)?

With ETFs, It's Easy Being Green

Green investing is in this season, as evidenced by the "green" exchange traded funds (ETFs). As this trend grows, there are ways to invest soundly. This fad has been around before, after the 1970s oil scare, but there is no doubt that alternative energy will be in demand globally during the coming decades now that terms such as "carbon footprint" are bandied about freely. Michael Herbst for Morningstar points out several approaches to green investing.

• Best-in0breed approach - The main idea is to invest in companies with industry-leading environmental track records.
• Clean Companies - Those companies that have no negative environmental impact.
• Environmentally Proactive - Includes firms that are linked to green initiatives such as alternative energy, energy efficiency and emissions reduction etc. 

As oil is well into the $90 range per barrel, alternative energy is becoming a necessity. The larger companies are not connected as much to the future of energy resources. The smaller to mid-size companies are actually breaking new ground in cleaner exploration and greener choices, reports Gary Gordon of ETFExpert.

Clean energy ETFs include:

• PowerShares Cleantech (PZD) 
• Market Vectors Environmental Services ETF (EVX) 
• Claymore/LGA Green ETF (GRN)
• PowerShares WilderHill Progressive Energy (PUW)
• PowerShares Global Clean Energy (PBD)
• First Trust NASDAQ Clean Edge U.S. Liquid ETF (QCLN)
• PowerShares Wilderhill Clean Energy (PBW)
• Market Vectors Global Alternative Energy ETF (GEX)

Clean Energy ETFs Are Staring Down the Barrel of $100 Oil

It's all coming to a point...a tipping point, even for exchange traded funds (ETFs). Americans are inches away from the effects of $100 a barrel oil, a slowing economy and the pressures of holiday shopping. Something's got to give. In addition to that, we are feeling more pressure to get a clearer understanding of what our individual carbon footprint looks like and how each of us can do our part to protect the planet.

Enter clean energy ETFs:

• PowerShares Cleantech (PZD) 
• Market Vectors Environmental Services ETF (EVX) 
• Claymore/LGA Green ETF (GRN)
• PowerShares WilderHill Progressive Energy (PUW)
• PowerShares Global Clean Energy (PBD)
• First Trust NASDAQ Clean Edge U.S. Liquid ETF (QCLN)
• PowerShares Wilderhill Clean Energy (PBW)
• Van Ecks' Market Vectors Global Alternative Energy ETF (GEX)

Year-to-date, PBW is up 44.7%, compared to United States Oil (USO), which is up 44.3%. Even if the price of oil takes a breather, clean energy is grabbing the attention of investors.

One of PBW's top holdings is First Solar, Inc. (FSLR). First Solar and its subsidiaries engage in the design, manufacture and sale of solar electric power modules. Shares of First Solar leaped $37.48, or 22.4%, to $204.60 in after market trading after they announced that they had trounced analysts estimates of their third quarter profits and sales.

The Many Shades Of Green ETFs

Have you ever considered an exchange traded fund (ETF) that mimics the color of money? Solar, biofuels, energy efficiency, wind and water are only a few shades the stocks come in, so why not an ETF that covers clean-tech or green? These ETFs offer a low-cost, diversified option of a basket of stocks that track a certain index. Kenneth Stier for CNBC reports that after 2006, around a dozen of these types of funds came on the market. Don't be fooled, green comes in many shades as every ETF has different components.

PowerShares Wilderhill Clean Energy (PBW) is the first of the funds, coming to market in March 2005. It is the largest with $1.3 billion under management, and is up 15.71% since its launch. The 42 stocks are mostly small-caps, and include companies like Suntech Power and Evergreen Solar. Van Ecks' Market Vectors Global Alternative Energy ETF (GEX) tracks a benchmark including 30 alternative energy companies. Large-cap firms make up around 30%, with another 30% in non-U.S. companies. Since May 2007, its inception, the share price has risen 36%.

Although investors may feel enlightened investing in the future of their planet, there is risk to be endured because of the narrow focus of these ETFs. If you are seeing green, take the time to research what makes up a particular green ETF. Here are some other "green" ETFs to consider:

• PowerShares Cleantech (PZD) 
• Market Vectors Environmental Services ETF (EVX) 
• Claymore/LGA Green ETF (GRN)
• PowerShares WilderHill Progressive Energy (PUW)
• PowerShares Global Clean Energy (PBD)
• First Trust NASDAQ Clean Edge U.S. Liquid ETF (QCLN)