The PowerShares Cleantech Portfolio ETF (NYSE:PZD - News)
finished first last year of 36 public equity funds focused on clean
energy and/or clean technology, according to Bloomberg New Energy
Finance.Of the 36 mutual and exchange traded funds worldwide that
Bloomberg NEF tracked, the average fund fell 6.6% in 2010. In
contrast, PowerShares Cleantech Portfolio ETF (
PZD
), which tracks The Cleantech Index rose 7.5% in 2010 and rose
11.6% in Q1 2011.Rafael Coven, Cleantech Indices' managing director
and index advisor, noted that the poor performance of most
renewable energy stocks in 2011 was a major reason why Cleantech
Index-based funds significantly outperformed their peers. Coven
said the index had less exposure to the sector because it is
diversified across many industries and includes only the best
companies involved with clean technology. The index is comprised of
72 public companies that are leaders in clean tech innovation and
commercial deployment from many industry sectors: energy
efficiency, renewables, advanced materials, water purification,
eco-friendly agriculture and more.Other funds tracking the
Cleantech Index had similar performance: they include the recently
listed PowerShares Cleantech ETF in Mexico (ticker: PZD.MX) and the
KSM Cleantech Index ETF (Bloomberg ticker: KSMCLNT) in Israel.Coven
said major issues hurting renewable energy performance in 2010
included low oil and natural gas prices, cuts in subsidies
particularly for solar in Europe,
commoditization of solar photovoltaic cells
due to massive production capacity increases and insufficient
product differentiation causing prices to fall rapidly (good for
users, bad for product makers), much higher competition for wind
turbines and gear boxes, a fundamentally flawed strategy of nearly
all alternative energy funds, and many other challenges.A lot of
renewable energy funds were hurt because of their heavy focus on
solar, he said. "Solar panels are becoming commoditized and
production volume was added in huge amounts, so pricing is
collapsing.That's a pretty ugly macroeconomic picture ... Even
though the business is growing tremendously, it's hard to make
decent money," Coven said.
Financial Advisor magazine reaches 90,000 financial planners and
investment advisors through its print publication and its
Web site
. It also publishes
FA green
, for advisors interested in socially responsible investing, and
Private
Wealth
, for advisors targeting the ultra high-net-worth market.