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.
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.