ETF Trends
ETF Trends

Whether you believe that global warming is a reality or not, the fact is that there are growing industries dedicated to finding sources of cleaner energy and you can access them by using green energy exchange traded funds (ETFs).

Two of the major alternative energy sectors are focused on generating solar and wind power. Industries such as these are not only gathering steam as a result of climate change, but many believe that “peak oil” will be a reality sooner rather than later. Although solar and wind ETFs are down year-to-date, both sectors have potential and room for improvement when the big picture is taken into account.

Solar energy is nothing new, but it remains one of the “big ideas” nonetheless. Money is needed to get many of the larger new projects up and running, while many of the smaller companies are scrambling to get noticed. There could be a need for these companies, too: by 2030, 1.3 billion people around the world will still be without power. [When Will Solar ETFs Shine?]

Major national players in the solar energy field include Germany and China, although in the Germans’ case, the economy may not be able to support such a movement. China, however, is ramping up investment in solar power by offering 50% subsidies for industrial projects as well as relevant power transmission and distribution systems that connect to grid networks, explains Martin Morris for Investment Week. [Why the U.S. is Embracing Solar Power.]

  • Claymore/MAC Global Solar Energy (NYSEArca: TAN)

  • Market Vectors Solar Energy ETF (NYSEArca: KWT)


As for the wind energy sector, there’s been a push here to get more Americans on this type of power. The U.S. Department of Energy has announced a goal of obtaining 6% of U.S. electricity from wind by 2020 – a goal that is consistent with the current rate of growth of wind energy nationwide. It is likely that wind energy will provide a growing portion of the nation’s energy supply, especially as the public demands clean energy and as the costs become lower. [Wind ETFs Benefit As Congress Steps In.]

AWEA fact sheet says that California is the most progressive state in the development of wind power. But make no mistake – the effort toward wind power is happening all over the country and growth is expected to continue at a steady pace. [China Gives a Tailwind to Wind ETFs.]

Right now, though, these solar and wind energy funds are below their 200-day moving averages. Mind the long-term trends to spot opportunities, and be prepared to act when they appear if you want exposure to green energy. [How to Follow Trends.]

  • First Trust Global Wind Energy (NYSEArca: FAN)

  • PowerShares Global Wind Energy (NYSEArca: PWND)

For more stories about alternative energy, visit our alternative energy category.

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.