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May 17, 2007 at 08:00 PM
Here’s a look at some of the newest exchange-traded funds that give investors exposure to alternative energy companies.
Producing electric power from the wind or sun has always seemed like a great idea, but in reality it often turns out to be impractical and difficult to earn a profit.
So it goes as well for investors. Short of owning your own windmill, there have been precious few options for those seeking to capitalize on the current groundswell of interest in alternative-energy and environmental technologies. Dozens of publicly listed companies engage in all sorts of ventures from geothermal power plants to hydrogen fuel cells, yet buying their shares means betting on a single company’s approach.
That’s highly risky, even for those with a strong understanding of the company’s technology and competitive position. While there are numerous mutual funds that are marketed as”socially responsible investments,”they usually don’t target alternative energy per se and often own shares of larger companies that have nothing to do with alternative energy.
Recognizing the problem, Wall Street is moving to satisfy investor cravings for a way to play the alternative energy”story”with a new crop of exchange-traded funds that give investors exposure to alternative energy companies in a straightforward, cost-effective way, yet without the risk of putting all their eggs in one basket. Several such ETFs have been launched in 2007, and more are in development.
Futures on the Way
