Largest Photovoltaic Solar Farms – Are they Advantageous over Distributed Rooftop Solar and Why Utilities Love Them
March 5, 2011A Real Estate Way to Go Green – Clean Technology and Green REITs
March 6, 2011There exists a reasonable number of ETFs in the US Stock Market which are dedicated to Clean Technology.However the performance of these ETFs has been quite abysmal in the last 2-3 years as the Green Industry has faced impossibly tough times.While Solar Energy crashed in end 2008,Wind Stocks took a massive fall in 2010.Ethanol Stocks had already faced horrendous years before 2008 with many of the darling ethanol stocks going bankrupt.It is easy to see stock value drop by 80-90% in a short span of time as the industry is still in the infant stage and dependent on government regulations and subsidies.There are a wide variety of Green ETFs which target a particular Green Sector as well as broad based ones which target the whole industry.Investors can choose depending on their preference,however the low risk strategy of investing in a Green ETF may not pay off at all as some of these ETFs have lost more than 50%.Here is a list of these ETFs for those Green Investors who are looking out for an investment in the CleanTech Theme using ETFs.
List of Major ETFs
Broad Clean Energy ETFs ( which invest in most Green sectors)
1) PZD
2) PBW
3) PBD
Sector specific ETFs
1) TAN (solar ETF)
2) FAN(Wind ETF)
3) NLR (Nuclear Energy ETF)
4) PHO (Water ETF)
5) PTRP (Clean Transporation).
Note this is not an exhaustive list of Clean Technology ETFs but more my choice of the better Green ETFs out there .
Investing in Green Stocks
Investing in Green Industry Stocks is a hazardous exercise for a new investor in the Green Theme.The industry is very dynmaic and unpredictable at the best of times and you can easily see your green investment go down by 90% or more.If you had invested in the Biggest Solar Cell Producer Q-Cells in 2008 your investment is down 90% till date.Again if you had put money in the biggest Wind Energy Company in 2009 and one of the biggest Green Companies Vestas,again your investment would be down more than 50%.A deep understanding of the Green Industry and the specific sectors is essential to Green Investing.The rewards are enormous for those who understand and can get in the right time.For eg. investing in the First Solar IPO would have increased your investment by almost 9 times in 4-5 years.Note investing in the Green Industry is not for the faint hearted or a Buffett follower who looks at well known simple industries where value can easily be found.Note even Warren Buffett is now a big investor in solar energy and Electric Vehicles BYD and Wind Energy through Mid American Holdings.
Summary
My advice is to individually invest in Green Stocks rather than go for Clean Energy ETFs.These ETFs have not proven to be very safe investments and I don’t think are very suitable for new dynamic industry like the Green Industry.Investing individually in good companies at the right time and valuation may provide more upside than investing blindly in a Clean Technology ETF.Note there are still great investments in Green Industry for the knowledgeable and newer opportunities keep arising.
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