And look at the weightings of individuals stocks - more concentrated funds - which contain fewer, heavily weighted stocks - outperform only if those top stocks happen to be winners.
Also consider sector weightings - is the fund heavily weighted toward solar, when you expect batteries and smart grid to outperform?
If you're not very familiar with the companies/sectors, hedge your bets by buying small amounts of several funds including more general (eg. clean energy) and more specific funds (eg. solar). As with mutual funds, review the long term performance, not just one year. You might want to stick with funds that have been around longer and have more assets - there's a reason why some ETFs are more popular than others.
All the funds we talked about will give you strong exposure and good diversification within their sectors, and most beat the S&P for the year.
Even though a fund outperforms one year, that doesn't mean it will outperform the next. For example, since most well-established clean energy players aren't in the US, domestic-only funds contain a greater percentage of more volatile stocks. That means US funds tend to outperform in good years, and under-perform in bad. While PBW underperformed nearly all the global funds in 2008, it outperformed the three global funds in 2007.
Green ETFs
|
Name
|
Ticker
|
Inception
Date
|
Focus
|
Cost
|
Assets
|
2009 Performance
|
|
iShares KLD 400 Social Index Fund
|
DSI
|
11/06
|
Social Leaders
Large Cap
|
0.50%
|
$96M
|
33%
|
|
KLD Global Climate Index
|
KLD
|
1/05
|
Global Climate
Large Cap Leaders
|
0.50%
|
$122M
|
32.2%
|
|
Market Vectors Alternative Energy ETF
|
GEX
|
5/07
|
Global Clean Energy
|
0.62%
|
$213M
|
10.5%
|
|
PowerShares WilderHill Clean Energy ETF
|
PBW
|
3/05
|
US - Clean Energy
|
0.69%
|
$772M
|
30%
|
|
PowerShares Global Clean Energy Portfolio
|
PBD
|
6/07
|
Global Clean Energy
|
0.75%
|
$203M
|
39%
|
|
PowerShares WilderHill Progressive Energy
|
PUW
|
10/06
|
Technologies that clean up conventional energy
|
0.70%
|
$58M
|
61%
|
|
PowerShares Cleantech Portfolio
|
PZD
|
10/06
|
Global Cleantech
|
0.67%
|
$145M
|
38%
|
|
First Trust NASDAQ Clean Edge ETF
|
QCLN
|
2/07
|
US Clean Energy-Related
|
0.60%
|
$43M
|
39%
|
|
Claymore/MAC Global Solar Energy
|
TAN
|
4/08
|
Global Solar
|
0.70%
|
$208M
|
27.7%
|
|
Market Vectors Solar Energy
|
KWT
|
4/08
|
Global Solar
|
0.65%
|
$34M
|
18.6%
|
|
First Trust Global Wind ETF
|
FAN
|
6/08
|
Global Wind
|
0.60%
|
$97M
|
24%
|
|
PowerShares Global Wind Energy
|
PWND
|
6/08
|
Global Wind
|
0.60%
|
$43M
|
31%
|
|
PowerShares Global Progressive Transportation Portfolio
|
PTRP
|
9/08
|
Global Efficient Transport
|
0.75%
|
$4M
|
52%
|
|
Claymore S&P Global Water
|
CGW
|
5/07
|
Global Water
|
0.70%
|
$260M
|
31.2%
|
|
PowerShares Global Water
|
PIO
|
6/07
|
Global Water
|
0.75%
|
$325M
|
42.2%
|
|
PowerShares Water Resources Portfolio
|
PHO
|
12/05
|
US - Water
|
0.64%
|
$1.33B
|
22.9%
|
++++
This article first appeared in our green investing newsletter, Progressive Investor.
