Investing in Solar and Renewable Energy Related ETF’s

Hello. I had a quick question. Is it possible to invest in the REW 40 index? I am new to investing, and was wondering if I could just invest in the REW 40 index, or do I have to invest individually in each company? Thank you for your help. — John G., Plymouth, MA

John – great question. You cannot invest directly in the REW 40 index, you would have to purchase each of the stocks that make up the REW 40 separately. However, there are investment vehicles called Exchange Traded Funds (ETF’s) that give you the diversification of a mutual fund, but are more flexible and trade just like a stock.

There are a number of ETF’s that focus on the solar/renewable market sector. Below are some examples of some of the ETF’s that are currently available and what they have done so far this year.

ETF’s Symbol

Current Price $

Year To Date Performance %


FAN

14.55

16.21


GEX

24.63

5.5


KWT

15.51

9.53


NEX

221.13

24.24


PBD

14.93

18.02


PBW

10.35

20.07


PUW

18.62

24.97


PWND

15.06

28.72


PZD

20.37

12.29


QCLN

14.11

24.99


TAN

9.9

12.88


 

 

 


Popular Indexes

 

 


 

 

 


S&P 500

921.23

1.99


S&P 500 Equal Weight

1250.23

12.03


Dow Jones

8539.73

-2.7


NASDAQ

1827.47

15.88


One note of caution — each ETF is not always composed of the same stocks or if they do have the exact same stocks they may have different percentages of each stock. A perfect example is illustrated in the popular indexes section above. The S&P500 and the S&P500 Equal Weight have the EXACT SAME 500 stocks in them the only difference is that the S&P500 index is capitalization weighted (bigger stocks have more influence in the index) and the S&P500 equal weighted give EVERY stock of the 500 equal weight. As you can see from their respective performance to date — it can make a VERY SIGNIFICANT difference in performance — 1.99% vs 12.03%.

For a further example of this, check out my blog on this subject in regard to how this difference would have affected your return when investing in oil — which is often related, at least in the mainstream press,  to movements in solar stocks.

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I have worked, for 33 years as an independent analyst and investor in small emerging technology companies. I have been actively involved in following developments in the renewable energy sector since 1977 and am regarded as an expert in this field. I was the contributing editor for the past 17 years to the Photovoltaic Insider Report, the leading publication in Photovoltaics industry that was directed at industrial subscribers, such as major energy companies, utilities and governments around the world. I currently am a consultant to a number of technology and solar related companies. I can be reached via e-mail at: solarjpl@aol.com. Visit my website for the promotion of solar energy - www.sunseries.net

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