In this week’s Macro Theme, we review our “Slowing Dragon” theme. We began discuss...
Alternative Energy ETF for 2015
11/20/2014 9:00 am EST
So what energy stocks would I buy for next year? I think 2015 is going to be the year of renewables, especially solar, forecasts Nick Hodge in Outsider Club.
Prices for renewables are expected to continue their descent. Installations, because they currently account for such a small part of overall capacity, can grow by many multiples very quickly.
One way investors can do well is by simply buying a solar ETF that spreads your risk while still giving you direct exposure to the sector.
I like the Guggenheim Solar ETF (TAN). You get exposure to 27 quality companies in various places on the solar value chain, from cell and module producers like Trina Solar (TSL), Canadian Solar (CSIQ), and First Solar (FSLR), to installers and leasers like SunEdison (SUNE) and SolarCity (SCTY).
And you get broad geographic access: 47% in the US, 21% in China, 19% in Hong Kong, 11% in Europe, and 1% in Canada.
Alternatively, you can buy a broad-based alternative energy ETF that includes not only solar, but also wind, smart grid and lighting, biomass, and even hydrogen.
One of the most diversified I've found is the Market Vectors Global Alternative Energy (GEX). There, you get 31 companies with only two of the ten being solar companies.
Eaton (ETN), which is a backend power management play on renewable energy adoption, is actually the top holding.
I'd also be remiss if I didn't mention nuclear here. With Japan gearing up for restart and robust nuclear plans in Asia and the Middle East, nuclear in general and uranium plays with quality deposits in particular could have a good 2015.
The Market Vectors Uranium/Nuclear Energy ETF (NLR) is the easiest way to play it.
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