When it comes to alternative energy exchange traded funds, solar ETFs usually command the most attention, but investors may want to acknowledge wind energy funds as near-term trading ideas.
For instance, the PowerShares WilderHill Clean Energy Portfolio (NYSEArca: PBW) and First Trust NASDAQ Clean Edge Green Energy Index Fund (NasdaqGS: QCLN) both include broad exposure to U.S. clean energy companies.
Additionally, the First Trust Global Wind Energy Fund (NYSEArca: FAN) focuses on the wind industry but it is slightly more diversified with a global scope.
Some market observers argue that the lighter wind should be a catalyst for renewable energy investors to gain exposure in diverse places. Investors should look beyond a single firm or region in the nascent industry.
“Wind is in a boom period in the States. For the first time, installed wind capacity was greater than hydroelectric, according to the American Wind Energy Association. The American Wind Energy Association says there are wind farms in 41 states – and one of the most recent was developed in North Carolina,” according to OilPrice.com.
Investors, though, can instantly diversify across the clean energy space through a broad ETF. For instance, PBW and QCLN include a range of alternative energy companies, including those engaged in solar photovoltaics, biofuels and advanced batteries.
In 2015, the Group of Seven developed industrial nations have agreed to significantly cut down fossil fuel consumption in a bid to diminish harmful greenhouse gas emissions, potentially setting the stage for renewable energy and sector-related exchange traded funds.
“Nationally there’s no shortage of money coming in either. AWEA CEO Tom Kieran told an audience from an assembly plant in General Motor’s factory in Texas that around 18,000 MW of wind capacity is in the pipeline – representing US$60 billion over six years. In addition, the global manager for renewable energy at GM – Rob Threlkeld, said that it was aiming to have every single one of its operations powered by renewable by 2050. Currently half of the power at the Arlington plant is wind power and by next year it would be 100 percent,” according to OilPrice.com.
For more information on the renewables space, visit our renewable energy category.