Mutual Fund & ETF

Bill Paul Not every investor wants to be a green investor, but every investor – institutional and individual alike – should be prepared to take advantage of a company’s greenness. According to a recent study sponsored by Environmental Leader, an online publisher, consumers are willing to spend more on products and services that they consider to be environmentally-friendly. That’s why 82% of respondents said they plan to use more green messaging in their marketing. But how can an investor tell a genuinely green firm from the phony ones that practice “greenwashing?” One place to look is Portfolio 21. As...

Tom Konrad, CFA I included the Powershares Global Progressive Transport Portfolio (PTRP) as an investment option instead of three stocks in my Ten Clean Energy Stocks for 2010, as part of a simplified portfolio for small investors wanting to minimize costs by making fewer trades.  The other Exchange Traded Fund I used in this way was the First Trust Nasdaq Clean Edge Smart Grid Infrastructure Index Fund (GRID).  I took a look at the holdings of the Smart Grid ETF here, and they are not exactly what you would expect from the name.  Since it makes sense to know...

Tom Konrad, CFA First Trust Launched a Grid Infrastructure Exchange Traded Fund (ETF) on November 17th.  Although the First Trust Nasdaq Clean Edge Smart Grid Infrastructure Index Fund (Nasdaq: GRID) is labeled a "Smart Grid" ETF to capture popular excitement around smart grid technology, it covers the whole grid infrastructure sector.  This broader focus is good for clean energy investors. I've been an advocate of investing in electric transmission and smart gird stocks since early 2007, and for almost a year now, a regular reader has been telling me to create a transmission ETF so he can buy...

Charles Morand Last week, I conducted an analysis showing the lack of evidence supporting claims that oil and alt energy returns are strongly correlated (claims that sometimes come from outfits as reputable as Bank of America Merrill Lynch).     I don't want to belabor this topic but I thought I would post the results of another, similar analysis I conducted following comments I received on how to improve the first one. In a nutshell, the comments suggested I do the following: 1) Look at daily correlations or even smaller periods, as "common knowledge" market...

UPDATE 3/4/2011: An up-to date article on selecting green mutual funds and ETFs can be found here. Green energy Exchange Traded Funds (ETFs) are the simplest way to invest in the sector at reasonable expense.  Here is what you need to know to choose. Tom Konrad, Ph.D., CFA Why ETFs? Investors interested in a simple way to invest in a diverse basket of renewable energy and energy efficiency companies should consider Exchange Traded Funds (a.k.a. ETFs) first.  Although green energy mutual funds will be more familiar to many investors, they come with costs that are difficult to justify...

UPDATE 3/4/2011: An up-to-date article on selecting green mutual funds and ETFs can be found here. Tom Konrad, Ph.D., CFA Most investors looking to get into clean energy think first of mutual funds.  Here are the options, and how to choose. We track seven mutual funds with a focus on green energy and climate change at AltEnergyStocks.com, since the American Trust Alternatives Fund closed early this year.  I split them into two categories: the funds with a primary focus on clean energy, and those with a primary focus on the environment.   The clean energy funds are: the Firsthand...

Charles Morand The relationship - or lack thereof - between oil prices and the performance of alt energy stocks has been a long-time interest of mine. I discussed it last in late March when I looked at correlations between the daily returns of alt energy and fossil energy ETFs. At the time, I found that only a weak relationship existed between the two and that if someone wanted to make a thematic investment play on Peak Oil, alt energy ETFs were not an ideal way to do so.  Seeing as the popular press and countless "experts"...

Tom Konrad, Ph.D., CFA My Quick Clean Energy Tracking Portfolio continues to outperform all benchmarks and expectations... is it luck, or did I stumble onto a better way to invest in green energy stocks? I continue to be stunned at how the portfolio which I intended as an easy way to duplicate green energy mutual fund performance at much lower cost continues to blow those green mutual funds out of the water.  I last published an update on this portfolio at the end of May, and was shocked to find that it had beaten the funds it was...

Charles Morand This is the third installment of my review of the book book "Investment Opportunities for a Low Carbon World". The second installment covered geothermal power and energy efficiency and the first installment covered wind and solar. This post reviews three interrelated chapters on the world of cleantech and alt energy indices, funds and ETFs. Two of these three chapters are my favorite in the book so far -  they provide very useful information for the novice investor with an interest in alt energy investing but limited time and knowledge for successful stock picking.  Cleantech...

Vacation and Meet Me at the Colorado Renewable Energy Conference or the International Peak Oil Conference. Tom Konrad, Ph.D., CFA I'm on vacation this week, so I'm going to leave you with a preview from a presentation I will be giving at the Colorado Renewable Energy Conference on Aug 29 in Golden Colorado. I'm updating my Investing in Renewable Energy presentations, and I've been able to incorporate a lot of the work Charles and I did on clean energy mutual funds and ETFs since January this year. ETF Holdings Revealed Charles did some in-depth work...

Charles Morand At $126 billion transacted in 2008, up from $11 billion in 2005, the global carbon market is the fastest growing commodities market in the world and, provided that an agreement is reached at the COP15 conference in Copenhagen and that the US adopts a cap-and-trade program, this growth could go on for several more years. Yet this is a market that remains comparatively unknown for a number of reasons, not the least of which is the fact that the rules surrounding it are very complex. Unlike other commodities, to successfully invest directly in...

Charles Morand Natural gas is the one commodity that has mostly resisted the rally ushered in some three months ago by a growing consensus that the worse may be over for the economy. A number of reasons have been put forward to explain this, including record storage levels and a growing supply base being unlocked through shale gas production in North America.   Yet natural gas' future looks bright: (a) it burns a lot cleaner than coal, making it a superior alternative to meet base- and peakload power requirements in a carbon-constrained world; (b) it...

Charles Morand A few months ago, I conducted analyses of the wind and solar power ETFs. I've recently turned my attention to the general alternative energy ETFs, or those that span several sectors. The general alt energy ETFs fall into two categories: 1) US Only and 2) Global. The US Only ETFs are the First Trust NASDAQ Clean Edge US Liquid (QCLN) and the PowerShares Clean Energy (PBW). The Global ETFs are the iShares S&P Global Clean Energy Index ETF (ICLN), the PowerShares Global Clean Energy Portfolio (PBD) and the Van Eck Global Alternative Energy Fund (GEX). The chart below shows...

Two months ago, Tom told us how he'd dipped a toe into the black stuff (i.e. bought the OIL etf) on grounds that current supply destruction related to the depressed price of crude oil would eventually lead to the same kind of supply-demand crunch that led oil to spike during the 2004 to mid-2008 period. If you need evidence that the current price of crude is wreaking havoc in the world of oil & gas exploration, look no further than Alberta and its oil sands. The oil sands contain the second largest oil reserves in the world after...

The credit crisis and ensuing collapse in equity markets hasn't been especially good for the mutual fund industry (especially of the equity type). Over the weekend, I ran a search on Morningstar's Fund Quickrank using "U.S. Stocks Funds" as a category and "Total return %: 1 Year" as a ranking field. The top-five ranked funds (as at March 20, 2009) and their performances are outlined in the table below, excluding fees. The group average, containing 9,978 funds, is -40.43%.   Fund Name Ticker 1-Yr Total Return (%) Gabelli ABC GABCX -1.52 ...

When I was researching my Comparison of Clean Energy Mutual Funds and Clean Energy Tracking Portfolio articles, I came across something strange: the American Trust Energy Alternatives Fund (ATEAX) did not seem to have a listing on American Trust's website.  However, finance sites were still publishing price and holdings data, and there was no recent news, so I didn't think much of it, since other funds seemed superior based on both costs and fund holdings. Last week, I noticed that the fund's price had not changed since the end of February, so I did a little digging.  Here is...