by Harris Roen, Editor
Roen Financial Report
November 20, 2013
 

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The Roen Financial Report closely covers the universe of 30 alternative energy Mutual Funds (MFs) and Exchange Traded Funds (ETFs). We use a proprietary ranking method to pick the best funds, looking at measures that include fees, risk, tax liability, and the financial health of individual holdings within each fund. Subscribers can read a detailed report on green funds, including rankings and technical breakdowns, in both Excel and PDF format.

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Mutual Funds

Returns overall have been spectacular for alternative energy MFs. Even the lowest performer is up 27% in the past 12 months. The best performers are those strongly invested in solar, specifically ALTEX and GAAEX, as the solar sector has been on an absolute tear. It should be noted, however, that some of these high fliers are still down from their highs of several years ago.

A new fund has been added to our ranking list, Green Century Balanced (GCBLX). It does not specifically invest in alternative energy companies, but instead has a broader green investment agenda. Its principal strategy is to invest in “environmentally responsible and sustainable U.S. companies, many of which also make positive environmental contributions.” There is a good Reuter’s article on GCBLX, recommending it for the fossil fuel divestment crowd. It comes onto the alternative energy mutual fund list as a Rank 2 (funds are ranked from 1 to 5, with 1 being the best).

Exchange Traded Funds

Returns for alternative energy ETFs have been strong, like their MF counterparts, though gains have been much more variable. TAN has returned an astounding 240% for the year, and Market Vectors Solar Energy (KWT) gained 185%.

Of the two funds, TAN is higher ranked due to several factors. TAN is a much larger ETF, managing over $400 million as compared to about $30 million invested by KWT. This makes TAN a more stable investment platform. Additionally, TAN has somewhat better fundamentals in its underlying assets when looking at price/sales and forward price/earnings ratios.

On the down side, three of the alternative energy ETFs show a loss for the year. iPath Global Carbon ETN (GRN) is down by more than half, reflecting the continued struggle in European carbon markets.

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IMPORTANT INFORMATION

Individuals involved with the Roen Financial Report and Swiftwood Press LLC do not own or control shares of any companies mentioned in this article. It is also possible that individuals may own or control shares of one or more of the underlying securities contained in the Mutual Funds or Exchange Traded Funds mentioned in this article. Any advice and/or recommendations made in this article are of a general nature and are not to be considered specific investment advice. Individuals should seek advice from their investment professional before making any important financial decisions. See Terms of Use for more information.

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Remember to always consult with your investment professional before making important financial decisions.

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