are taking a step back on Monday, but it is no secret
these funds have been on fire to start 2013
. Even with a loss of 2.4 percent on Monday, the Guggenheim Solar
) is still higher by 17.4 percent over the past five trading
The Market Vectors Solar ETF (NYSE:
) is off about one percent today, but that fund is still up 17.2
percent over the past five sessions.
KWT and TAN are not the only ETFs offering exposure to the
alternative energy theme that have soared since President Obama won
reelection in early November.
"It may not be evident to all, but since the completion of the
November elections in the U.S., 'alternative energy' focused ETFs
have staged an impressive rally, closing at multi-month highs in
some cases as recently to close out last week," said Street One
Financial Vice President Paul Weisbruch in a research note.
Weisbruch highlights the PowerShares WilderHill Clean Energy ETF
) as a prime example of an alternative energy ETF that has soared
since Election Day. Home to $133.2 million in assets under
management, making it the largest alternative energy ETF by that
metric, PBW has gained about 13.4 percent since November 7, 2012,
the first trading day after Election Day.
"In fact, if one quickly examines fourteen Alternative Energy
based equity ETFs that are available to investors, one will note a
recurring theme, swift rallies across the board since November
whether the fund in question is related to Wind Energy, Nuclear
Energy, or more broadly categorized as Clean Energy," said
The move higher by alternative energy ETFs following Election
Day is arguably not surprising because President Obama has long
been an advocate for increased U.S. investment in solar and wind
power, among other alternative energy sources. Obama has made that
advocacy a cornerstone of his energy plans through two
Conversely, Republican challenger Mitt Romney championed
additional investment in domestic fossil fuel sources, such as
coal, prompting a pre-election run-up and post-election slide for
the Market Vectors Coal ETF (NYSE:
What is critical for investors to note is that the recent surge
in clean energy ETFs may be short-lived because Obama may lack the
congressional support necessary to significantly expand U.S. use of
solar and wind power. Republicans control the House of
Despite the fact that Democrats control the Senate, many states
that are rich in oil and natural gas such as Alaska, Louisiana and
North Dakota have at least one Democratic senator. Montana has two.
Those senators may not be apt to turn their backs on high-paying
traditional energy jobs in their home states to embrace solar and
On a related note, investors in the alternative energy space
should recall the overall performance of these ETFs through
President Obama's first term. Not only did KWT and TAN have to
engage in reverse splits
to artificially inflate their share prices
, but from the time President Obama was inaugurated in January 2009
through Election Day 2012, PBW and the First Trust ISE Global Wind
Energy Index Fund (NYSE:
) each lost more than 40 percent.
For more on ETFs, click
(c) 2013 Benzinga.com. Benzinga does not provide investment advice.
All rights reserved.
Gain access to more investing ideas, tools & education.
Get Started on Marketfy, the first ever curated
& verified Marketplace for everything trading.