Morose in markets, lack of news means buy time?

Green funds are likely to gap up in late Q4 and early Q1

Historically the 3rd year in a US Presidency is the worst for North American capital markets, particularly equities, and as Q4 approaches we have to examine whether this year offers the usual cyclical investment opportunity. The cycle makes sense because the honeymoon for the US President is long over, and the 3rd year is a bit early to pump the economy for the election. 2012 will be a different story, inflation will be the fear, and equities will be back in vogue.

While searching for news on "green mutual fund" it seems there isn't too much going on right now.

175 results but that's just Google trying hard... when I take the quotes off there are 2 results. I'd say that right there is an indication that things are a bit too quiet, and green funds are likely to gap up in late Q4 and early Q1.

Joe Trainor, CIM
September 13, 2011

Investing in Green Mutual Funds and ETFs

Buying cleantech investment funds safer than individual stocks

by Gavin Adamson, TheGlobeandMail.com

As with hybrid autos and organic food, consumer demand is driving the growth of green investment choices, and new options come available every week.

“People are asking about green and socially responsible investments, and certainly more institutions and pension funds are paying more attention to the area,” says Adrian Mastracci, president of KCM Wealth Management in Vancouver. But for many investors, putting money into specific stocks of fledgling green companies can feel too risky, says Mr. Mastracci. To diversify, investors can turn to a handful of mutual funds and exchange trade funds (ETFs) that provide broad environmental criteria among their investment screens, along with “pure-play” green portfolios that hone in on specific industries in solar, wind and other alternative energy industries.

Passively invested ETFs automatically put money into a basket of funds defined by an index. The companies that market these ETFs charge management fees at a fraction of the cost of the mutual funds, whose stocks are selected by professional money managers. The management expenses are subtracted from the return of the investment.

“ETFs are just cheaper,” says Larry Berman, chief investment officer at ETF Capital Management, who owns a couple of green-focused ETFs in his portfolio. “They give you the index and you don’t have to worry about volatility in individual stocks.”

The tradeoff is that an actively managed mutual fund may outperform the markets or reduce volatility in a portfolio in the long run, whereas an ETF will track only an index. And Mr. Berman notes that green ETFs tend to be a little more expensive than those that mimic broader indexes because they are more expensive to run.

Generally, more focused investments should make up a smaller part of your portfolio, says Dan Hallett, president of his Windsor-based research firm, Dan Hallett & Associates, Inc. “The more narrowly you zoom in on the market, the more volatility you are likely to experience,” he notes, but if you’re prepared for long-term investing, volatility isn’t inherently bad.


SOLAR ENERGY

ETFs focusing on solar power are especially hot. In April, New York-based asset manager VanEck Global Investors, which sells several green ETFs, launched the Market Vectors Ardour-Solar Energy ETF, with a management expense ratio (MER) capped at 1.09 per cent. It follows the Ardour Solar Energy Index, tracking companies that earn at least two thirds of their revenue from solar technology products. The companies must also have a market capitalization of at least $100-million, a limit that will include many small cap names.

The index favours bigger companies. Its largest constituent is Renewable Energy Corp. AS, a Norwegian company involved in the production of the wafers used in photovoltaic technology, most commonly in solar panels. First Solar Inc., a small-cap U.S. company that builds solar energy products, is weighted at more than 10 per cent in the ETF as well. The ETF holds a total of 34 names it trades on the American Stock Exchange (AMEX) with the memorable ticket, KWT.

VanEck’s ETF competes with the Claymore/MAC Global Solar Energy ETF, which tracks 25 international companies. Its mandate allows for companies that are less focused on the solar industry, however, but the top two holdings are the same. It’s MER is 0.65 per cent.



WIND POWER

Similarly, an ETF with the ticker FAN trades on the New York Stock Exchange. The First Trust ISE Global Wind Energy ETF invests purely in international wind-energy related technology companies. Vestas Wind Systems AS, a large-cap Danish wind turbine company takes a top spot in the portfolio of 52 publicly traded businesses with market capitalization of at least $100 million. Larger companies take a greater position in the portfolio.



CLEAN TECH AND ENERGY

In the United States, iShares offers the S&P Global Clean Energy Index ETF, based on a basket of international clean-energy related businesses tracked by Standard & Poors. The index of 30 stocks favours those with greater exposure to clean energy, which can include solar, wind, thermal and others. Again, Vestas Wind Systems is among the top holdings, along with First Solar, noted above. The ETF trades on the AMEX, and operates with an MER of less than 0.5 per cent.

The PowerShares Cleantech Portfolio, trading on the AMEX, casts a wider net. It invests in an index of 75 companies with market capitalization of between US$200 million and $1 billion. The businesses must report at least 50 per cent of revenues in clean energy technology. Siemens AG., the German industrial company that includes electrical energy generation as a business line, is the top holding. The fund reports an MER of 1.32 per cent.

Trading on the Nasdaq exchange is the First Trust NASDAQ Clean Edge U.S. Liquid Series Index ETF, with an MER capped at 0.6 per cent. It tracks the same industries, but narrows its investments to the United States.

Mr. Berman says he’s bullish on all these sectors, but they do have their risks. He says the investment theme isn’t new, and some of the stocks are already trading at relatively higher price to earnings multiples compared to the rest of the market.



GREEN MUTUAL FUNDS

Last month the HSBC Global Climate Change Fund entered a small field of mutual funds in the Canadian market that mix some of the riskier technology companies described above with well-known large-cap companies. The fund’s top 10 holdings include E.ON AG, the gas and electrical utility, and among the largest German companies.

Acuity Clean Environment Fund is similarly diversified, investing in the Canadian microcap solar-power tech company, 5N Plus Inc., along with a large-cap oil and gas miner and distributor SunCor Energy Inc.

Toronto-based investment company Criterion Investments sells two global mutual funds, the Criterion Global Clean Energy Fund and the Criterion Water Infrastructure Fund, which invests in a broader theme of water infrastructure, filtration and distribution. For example, the French consumer products company, Nestle SA is a major holding in the water portfolio owing to its bottled water sales. Each is managed by Swiss-based Pictet Asset Management.

“These large funds can go out and buy these multinational companies, most of which are relatively clean tech,” says Duncan Stewart, a portfolio manager who runs Duncan Stewart Asset Management Inc. in Toronto.

The funds are available for a minimum investment of $500, with MERs that range from 2.0 per cent and upwards if you buy them from advisers, who may charge one-time sales commissions as well.

Germany's Bioenergy Villages point way to distributed energy

When Thomas Edison invented electricity, he envisioned a system whereby electricity would be generated wherever it was to be consumed. In the USA, State-wide energy monopolies ended all that, as businessman accepted price controls (eg guaranteed profits) in exchange for becoming a monopoly power provider.

Germany is spinning the wheel and pointing to a decentralized, distributed energy future. this Wall Street Journal article has lessons for many small towns and villages across North America and the main one is: Work Together!

In Germany's Biofuel Villages, Power to the People rules

By MARY M. LANE, WSJ

OBERROSPHE, Germany—On Friday nights, villagers here pile into the town's only bar to play "Nail and Wood," a beer-fueled quest to pound a nail into an upright log with the most speed and accuracy. Later, they return home to warm cottages, fully heated by a wood-chip plant they built in 2008.

"We don't need fancy bar games, we've got wood," says 51-year-old Hans-Jochen Henkel, a spokesman for the 850-person town in western Germany and a member of the committee that helped raise funding for the plant. "And we don't need energy from large corporations. We've also got wood for that."

Long before the German government announced plans to phase out atomic power in the wake of the recent nuclear meltdown in Japan, dozens of villages across Germany, distrustful of mainstream energy sources, began generating their own heat and electricity from biofuels. Their goal was to free themselves from potential nuclear disaster and dependence on foreign oil, while uniting their communities through a greater sense of purpose.

"We don't want to be getting 3,050 liters of oil off some ship from Saudi Arabia," says Hans Bertram, a 72-year-old retiree living in Oberrosphe. This way, "the money stays here in the community."

Indeed, a desire to stimulate local economies, coupled with the security that comes from steady energy prices, are the main economic factors behind the movement, says Uwe Fritsche, a researcher at the Öko Institut, an ecology research center in Darmstadt.

The first of Germany's so-called bioenergy villages, the 750-person town of Jühnde in the central part of the country began as a large-scale experiment by scientists from the nearby University of Göttingen. The village started producing heat and electricity from liquid manure and locally grown energy crops in 2005.

Since then, about 70 other towns in Germany have become full-fledged "biovillages," meaning they use fuel derived from substances such as wood chips, crops and manure to heat their homes and generate electricity that they then sell to the local power grid. Some 14 other towns and villages are in the process of converting to other renewable-energy sources, such as wind and solar power, according to the Ministry of Agriculture.

Although these communities account for a small fraction of Germany's overall energy demand, and larger cities remain hesitant to convert fully to biofuels, the green villages "remain inspirational forerunners," says Mr. Fritsche.

Shaped like a thin rectangle with timber-framed houses built along a lush, sloping valley, Oberrosphe had to install more than 7,000 meters, or about 4½ miles, of heating pipes in order to convert to biofuel heat. The village voted that residents would pay a flat rate of €6,000, or about $8,650, to link to the new heating grid, regardless of their proximity to the wood-chip plant.

"We didn't want one family bearing a higher cost burden just because of where in the village they lived," says local resident Otto Krebs.

Oberrosphe built a wood-chip burner to produce heat for the 55% of households that initially joined the network and installed solar panels on top of the plant to generate power to sell to the local electric utility. The village plans to install a biogas plant in November to ensure it can meet the energy needs of all of its households. Many families hesitant about joining the co-op three years ago are in the process of joining now, despite having to pay €2,000 in back fees, says Mr. Henkel, the spokesman.

While the German government provides some funding for these projects—Oberrosphe received €1 million in government subsidies toward the €4.2 million in total capital it needed—the bulk of the financing falls to the local communities themselves.

Many residents say the investment has been well worth it.

Villagers in Oberrosphe estimate they save around €400-€500 annually on heating costs and even more when savings in maintenance costs to oil heaters are factored in. Jühnde residents, meanwhile, save as much as €900 per year in heating and maintenance costs, and the town makes about €1.1 million annually from selling electricity into the local power grid, says Eckhard Fangmeier, a town spokesman.

By contrast, German heating prices have gone up an average of 19% for gas and 94% for oil nationwide since January 2005, according to March statistics from Verivox.

Mr. Fritsche, the researcher, sees a revival of Germany's rural spirit in the proliferation of renewable-energy villages. "One of the drivers has been and continues to be involvement of the local people. It gives them a new identity and a new social interaction," he says.

Dollar-cost averaging can protect against inflation

Young couples in the USA should look at buying a first home, or moving up if the pricing in your area allows greater quality and size. In Canada most areas have more fully-valued real estate, however stock markets on both sides of the border tend to experience weakness during the 3rd year of a US Presidency, and 2011 is proving the rule. It is usually too early to pump the economy for the new election, and too late for the honeymoon effect to linger, so the third year is traditionally soft.

Staring a dollar-cost averaging program to accumulate green equity and other socially responsible investment funds is a prudent strategy. Even if you can only invest 50 dollars per month, or 100 or 200 dollars, over time this will become substantial through compound growth. And, if inflation returns in future years, you'll have bought a lot of shares at today's deflated, depressed prices.

Turtles can not only beat the hare in certain races, they can also outlive them ten or even a hundred times.

BUY USA residential real estate NOW!!!

Naples FL and Las Vegas NV both positioned for strong price growth

Young people and investors wondering when would be a good time to get back into the USA residential real estate market may want to ponder this one word for a few seconds: NOW!!! Canadian snowbirds looking for that ideal retirement shack need to take a peek at Naples in Florida and Las Vegas in Nevada, for these hotspots currently provide tremendous value for the longterm real estate investor.

Las Vegas homes are now selling for median price of $118,000, down from $314,000 just four years ago. It may be awhile before the 2007/2008 prices are eclipsed, yet if homes make it halfway back to previous highs, today's buyers will experience a 100% jump in value and even bigger rise in equity (assuming a mortgage covers part of the purchase).

When reviewing residential real estate price trends in Naples, Florida, a similar pattern emerges. The median house in Naples now sells for $141,000, yet this same property sold for $391,000 just over four years ago. Naples has a lot of mansion-like homes on or close to waterways, so the 140k actually buys you a lot of house. The other factor is relative strength, as historically Naples real estate sold for more than the Florida and national averages, and that hasn't been the case the past couple of years. Look for Naples to become a semi-Canadian city as thousands of Ontario buyers snap up these great deals!

3 main reasons to BUY USA real estate NOW:

One, bottoming prices!

Two, attractive interest rates!

Three; inflation will return, driving up home prices yet again.


Yes Virginia, it is time to believe in the USA, take the plunge and buy a home for the longterm.

Is electric vehicle infrastructure provider Ecotality a takeover candidate?

Will ECTY be taken out by an oil company?

In light of Total Pete's $1.4 billion investment in SunPower (SPWRA), companies that provide infrastructure for the electric car market may find themselves sought after by oil companies.

Think about it, for even though you may be able to charge your car at home and at work, there are many stretches of highway that will require fast-charging stations, and ECTY makes these and related electric vehicle support products.

After peaking around $4 per share in early May, ECTY has traded down to the $3.65 level the past 2 days. Support seems to be around the $2.80 to $3 level, so now would be a good time to research this baby and see if she has the potential to grow into a significant and profitable company.

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