ETF XRAY

Making Green with Clean ETFs

By Carl Delfeld of the Chartwell ETF Advisor

Investing in clean energy and environmental sectors through exchange-traded funds is all the rage due to high oil prices and the attention paid to global warming.

While the media and policy establishment are preoccupied with global warming issues that may or may not have important consequences in 50 years, an environmental mess exists in China right now.

Here is just a sampling of facts drawn from a recent article by Elizabeth Economy in Foreign Affairs to get your attention.

• China is the world leader in air and water pollution.
• Sixteen of the most polluted cities in the world are in China.
• According to World Wildlife Fund, China is the largest polluter of the Pacific Ocean.
• 2/3 of China’s largest 660 cities face a water shortage right now.
• The EPA estimates that 25% of the particulates hovering over LA originate in China.
• In converting coal into energy, America is six times more efficient than China.
• About 190 million people in China are sick from contaminated water.
• Netherlands’ Environmental Agency states that China is the world’s largest contributor of CO2.
• In China about 750,000 infants a year face premature death due to respiratory disease.
• Chinese experts believe that only about 10% of China’s environmental laws are enforced.

Tom Lydon of ETF Trends put together an excellent summary of green ETFs and how they are doing so far this year.

PowerShares WilderHill Clean Energy Portfolio (PBW) - up 33.4%
PowerShares Cleantech (PZD) - up 30.4%
Market Vectors Environmental Services ETF (EVX) - up 23.2%
Claymore/LGA Green ETF (GRN) - up 7.4%
PowerShares WilderHill Progressive Energy (PUW) - up 16.2%
Market Vectors Global Alternative Energy ETF (GEX) - up 11.5% for the last three months, having launched in May
PowerShares Global Clean Energy (PBD) - up 11.1% for the last three months, having launched in June
First Trust NASDAQ Clean Edge U.S. Liquid ETF (QCLN) - up 6.6% for the last three months, having launched in February
Market Vectors Nuclear Energy ETF (NLR) - up 5.4% for the month, having launched in August

The Chartwell New Venture ETF portfolio has a couple of these green ETFs and may add more.

The Big Daddy of Green Indexes

By Carl Delfeld of the Chartwell ETF Advisor

While the PowerShares WilderHill Clean Energy (PBW) exchange-traded fund has done well for a while, get ready for an ETF tracking the world’s biggest climate change index. The index was launched earlier this week and may give investors the opportunity to profit from companies that fight global warming.

HSBC, the world’s third largest bank, developed the index to track 300 companies worldwide that make money from fighting climate change, such as wind turbine and solar panel manufacturers and biofuel companies. Unlike some other climate change indices, investment funds will be able to buy or sell the index in the same way that they can trade mainstream equity indices such as the UK’s FTSE 100 index or the US’s S&P 500.

The 300 companies in the index – the HSBC Global Climate Change Index – have sharply outperformed mainstream benchmarks signaling the growing demand from investors for securities that fight global warming.

For example, since January 2004 the 300 companies in the index have produced nearly twice the profits or returns of other stocks as measured by the MSCI World Index, which tracks equities across the globe including in the US, UK, Japan and Germany.

Chartwell ETF has had PBW in its New Venture model portfolio. Find out about all of Chartwell seven model portfolios today.