PowerShares Cleantech Portfolio ETF (NYSE: PZD) #1 in 2010

PZD beats 35 other green energy and clean technology funds




According to Bloomberg New Energy Finance research, PowerShares Cleantech Portfolio ETF (NYSE: PZD) finished first of 36 public equity funds focused on clean energy and/or clean technology.

Of the 36 mutual and exchange traded funds worldwide that Bloomberg NEF tracked, the average fund fell 6.6% in 2010. In contrast, PZD, which tracks The Cleantech Index TM (AMEX: CTIUS) 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. "Since the Cleantech Index is diversified across many industries, it had less exposure to the volatile renewable energy sector. In addition, the Index includes only the best companies in each sector which tend to fare better than their sectors as a whole. I expect this strategy will result in continued long-term outperformance of peer funds and indices, but I certainly don't expect that CTIUS-linked funds will finish first in a given year. That's short-term stuff. We track a long-term trend.”

Added Cleantech Group's Managing Director for Europe & Asia, Richard Youngman, "The Index doesn't track an industry or a region, but rather a global megatrend that cuts across a wide range of industries and geographies. Narrow industry sectors will rise and fall dramatically, but we believe the growth in demand for clean technology will continue to accelerate across many industries for decades. The Index's four-year performance relative to the S&P underlines that.”

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.

As part of its quarterly rebalancing, the Cleantech Index has added Switzerland's SGS S.A. (SGSN.VX) and Mistras Group (MG: NYSE) effective March 31, 2011.

Full online article on Investor Ideas about PowerShares CleanTech Portfolio

PowerShares Cleantech Portfolio, official website

Should longterm investors begin accumulating green mutual funds?

While it is true that anytime is fine for starting a dollar-cost-averaging (DCA) mutual funds investment program, it is also a fact that there are specific times that provide more profitable entry points, and these are obviously the months after extreme declines. Also, the maxim "never try to catch a falling knife" does not apply to DCA, as that is precisely what would provide the biggest gains. Imagine going fully invested after a 15% drop and then seeing the market fall a further 28%; that's obviously a big negative. Now imagine instituting a $100 (or $500 etc) per month automatic investment plan after that first drop; your 2nd, 3rd and 4th purchases are likely to be at tremendous prices, positioning you for solid longer term growth.

Let's address the question in the title of this post: Should longterm investors begin accumulating green mutual funds?

My advice would be yes, especially if you do not have positions currently. The 3rd year in the USA presidential election cycle is usually a down year, as the honeymoon is long over and it's too soon to really pump and prime the economy for an election. This means that between now and early December the overall direction could be down, meaning more and more shares will be accumulated at lower and lower average prices. Based on historical charts, there would then be profitable selling opportunities three to seven years later, meaning that investors with time horizons of ten to fifteen years can safely start building equity via DCA programs.

The greed and corruption of the Bush years created a decade of stagnation in USA stock market values, whereas the visionary leadership of Barack Obama is likely to kick off a lucrative bull market in the twenty-teenies.