PowerShares WilderHill Clean Energy(ETF) (PBW)

NetscribeETF (28.64) Submitted: 3/29/07 9:25 AM : Start Price: $19.08 PBW Score: -10.41

The issues global warming and climatic changes of such prime importance that Former U.S. Vice President Al Gore the politician turned preeminent environmentalist issued a dire warning to Congress on what he called a “planetary emergency” caused by global warming. Moreover he called for urgent congressional action to pass legislation to help reverse the ravages of global warming that threatens the survival of our civilization and the habitability of the Earth.


Tracking the Wilder Hill Clean Energy Index the ETF invest in companies that stand to benefit substantially from a societal transition toward cleaner energy and conservation. Though the fund did not have much fun fare at the launch it has picked up momentum recently and has net assets worth approximately $760 million. Majority of the holding, which satisfy the conditions are small and micro caps that have no consistency in earnings and still enjoy attractive valuations. This has increased the funds volatility and the risks have high chances of turning in to huge gains


Allocation of the fund is skewed towards the industrial and information technology sector accounting for about 65% of the pie. The fortunes of the fund are greatly tied to the movement in energy prices. In the recently concluded OPEC meeting the members have decided to keep the oil production at current levels and called for planned reduction that would send the oil and gas price high. This is in turn raises the need for alternative energy, storage and power delivery components, cheap source of fuel and sets other green issue on the roll. The long-term future prospects of the fund look good and worth the buy but does not come cheap with an expense ratio of 0.60%.

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