This post is part of a regular series written by ETF Trends editor Tom Lydon, special for CNBC.com.
Green ETFs have been challenged ever since oil retreated off its record highs last July. The long-accepted feeling has been that as oil prices rise, so does interest in alternative energy. But there are some signs that this could be changing:
- While oil hovers around $50 per barrel, alternative energy/clean ETFs have managed to gain some ground, picking up about 30 percent in the last month
- Oil Prices Now
- Daniel Yergin's latest oil outlook
- President Barack Obama’s stimulus plan calls for a $98 billion investment in energy and the environment
- A survey of institutional investors representing more than $1 trillion in assets revealed that 49 percent of them are “more likely” or “much more likely” to increase their clean energy exposure now than they were a year ago (and you’ll note that a year ago, oil prices were hitting record levels)
- Credit for green energy projects around the world is loosening up
- NASA has also sounded the alarm that global warming is occurring even faster than thought; scientists at a conference in March warned policy-makers to “vigorously” implement plans to reverse the trend
- Green technologies received $836 million in 59 venture deals in the first quarter of 2009 alone. That’s almost as much the first six months of 2008.
One challenge to be mindful of with this sector is oil prices — as long as they remain low, it could keep this sector from becoming everything it could be. Not everyone thinks oil prices are going to stay so low forever, though.
Clean-energy ETFs have been up sharply in the last month: Market Vectors Global Alternative Energy has gained 25.8 percent and PowerShares Global Clean Energy is up 26.6 percent in the last month. In comparison, the Dow is up 18.6 percent and the S&P 500 has gained 19.8 percent in the same time period.
- Dow 30 Stocks: Extended Hours Quotes
Compare with Oil Stocks:
Tom Lydon is the editor of ETF Trends and author of iMoney: Profitable ETF Strategies for Every Investor.