5 ETFS to Keep You Cool

I had to cool off for a few days but knew I would write about President Obama’s global warming speech from earlier this week.  He had his prop, a white handkerchief to dab his supposed sweaty brow, and ‘statistics’ to back him up.  The takeaway from the speech is that the President stated that he will put his full executive weight behind the EPA to implement his programs aimed at improving the environment. 

Whether or not you believe this agenda is real and will be implemented or just hot air to rally the president’s base amid a variety of scandals is really not that important.  It is probably a good idea to add clean or renewable energy to your portfolio at least in a minor way.  The best way to do this from our perspective are ETF’s, that way you can diversify across this niche sector and avoid the Solyndra’s of the world.

Here are 5 renewable energy ETF’s priced under $20 and some comments about each.

PBW - PowerShares Clean Energy - $5.36

The ETF tracks an index of US-listed companies engaged in the business of the advancement of cleaner energy and conservation.  This ETF has a trailing P/E under 20 and looks very bullish from a technical analysis perspective.  Additionally, there is a $6 strike September 2013 option currently priced at $0.05, or $5, which could be another way to play this one.

ICLN - iShares S&P Global Clean Energy Index ETF - $8.80

This ETF tracks a global index of clean energy companies.  ICLN is up over 40% since December, but there is mixed signals in the short term technical analysis as to whether or not the momentum will continue.

QCLN - First Trust NASDAQ Clean Edge US Liquid - $14.11

This equity tracks an index of clean energy companies that are publicly traded in the United States.  The investment seeks investment results that correspond generally to the price and yield of an equity index called the NASDAQ(R) Clean Edge(R) Green Energy Index which includes companies engaged in solar power, renewable batteries, and alternative fuels.  There are very bullish long-term signals in the technical analysis.

PBD - PowerShares Global Clean Energy Portfolio - $9.74

This one tracks an index of global companies engaged in the business of the advancement of cleaner energy and conservation.  The ETF is up nearly 9.5% for the year but there are indications that the momentum is slowing when we look at the charts.

GEX – Van Eck Global Alternative Energy Fund - $15.22

We may have saved the best for last.  This one also tracks a global index of renewable and clean energy companies.  There are several options contracts priced inexpensively out until January 2014 if that is the way you decide to get into the sector.  The technical analysis looks decent in the short term, but very bullish after that.  GEX is up 14% for the year.

Have a great weekend and try and stay cool.

Disclosure: Goldman Small Cap Research analysts are neither long nor short these shares but may elect to purchase the stock within the next 48 hours.

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