Understanding ETFs isn’t anymore complicated than understanding stocks. ETFs are simply a collection or basket of stocks, funds, indicies and/or commodities that are traded like stocks on the exchanges.
From Mad Money:
Jim, is there an ETF that tracks alternative energy stocks? — Gus from Long Island, N.Y.
James J. Cramer: One popular ETF that tracks alternative energy plays is the Powershares Wilderhill Clean Energy Portfolio (PBW:Amex) . It holds 36 stocks in the alternative energy business, including Capstone Turbine (CPST:Nasdaq) , Plug Power (PLUG:Nasdaq) and UltraLife Batteries (ULBI:Nasdaq) , and the diversity may help protect investors from some of the wild swings you see in these types of stocks.
Investor’s Business Daily
Major Deals Fire Up Alternative Energy ETFs
Monday July 9, 7:00 pm ET
It tracks the Ardour Global Index, which holds 30 stocks. Half of fund is concentrated in mid caps, while 21% is in large caps and 29% in small caps. U.S. names make up 39% of assets. The rest of the portfolio is heavily weighted with names from Germany at 15%, followed by Denmark 12%, Norway 9%, Spain 7% and Austria 6%.
PowerShares WilderHill Clean Energy (AMEX:PBW – News) rose 0.91 to 22.46 on above ordinary volume. It holds 45 stocks, many of which overlap with the broader PowerShares Global Clean Energy (AMEX:PBD – News).
PBD gapped up .90 to 27.90. It holds 89 U.S. and foreign companies that make renewable energy and technologies that help make cleaner energy.
Both funds offer global exposure. The primary difference is that PBW holds only U.S.-listed names, while PBD holds names that are purchased locally.
The 47-stock PZD holds firms that provide “a knowledge-based product or service that improves operation, performance, productivity or efficiency, while reducing costs, inputs, energy consumption, waste or pollution.”
Much of the action in these ETFs came from surges in First Solar (NasdaqGM:FSLR – News), JA Solar Holdings (NasdaqGM:JASO – News), Trina Solar (NYSE:TSL – News) and Yingli Green Energy (NYSE:YGE – News), which all spiked 15% or more.
Phoenix-based First Solar gapped up 23.06, a whopping 24%, to 119.35. Volume more than quadrupled to its highest level since its November IPO.
The maker of thin-film solar panels said it signed five deals worth $1.28 billion in sales over the next five years. It also said it plans to spend $150 million to build a new production plant in Malaysia. That’s projected to be up in 2009.
Sales grew from 146% to 392% year over year the past four quarters. Earnings zoomed 188% to 220% the past three quarters. It beat analysts’ profit estimates by 100% and 271% the past two quarters.
China-based Trina Solar vaulted 9.29, or 16%, to 67.37 on more than double average volume.
It signed four deals with three Italian firms and a German one to build 99 megawatts of solar photovoltaic modules over the next two to three years. The values of the contracts were not disclosed.
Trina Solar shipped 27.4 megawatts of solar modules last year. Earnings blasted between 73% and a staggering 700% over the past four quarters. Sales exploded 144% to 490% over those periods.
This is a great link for building a dividend portfolio.
Ten new trends expected to see emerging in the world of exchange traded funds this year:
10 New ETF Trends for 2007 by Tom Lydon