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.
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.