Blown Away – Another Wind ETF
July 1, 2008

SAN DIEGO - (ETFguide.com) - Tuesday marks the first day of trading for the PowerShares Global Wind Energy Portfolio (Ticker: PWND). PowerShares’ new wind ETF is linked to the Nasdaq OMX Clean Edge Global Wind Energy Index and is designed to measure the performance of global companies engaged in the wind energy industry.

PowerShares is not used to playing second fiddle, but this time they got beat to the punch by the First Trust Global Wind Energy Fund (Ticker: FAN) which started trading two weeks ago. First Trust offers their wind ETF for 0.60% compared to PowerShares’ 0.75%.

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While both indexes have some similarities, there are some major differences. PWND is more concentrated with only 31 holdings while FAN offers more diversification with close to 70 holdings. Both indexes are heavily weighted in Europe and have a 55% weighting in the industrials sector.

During recessions, industrial stocks tend to loose about 50% of their value (I.e., the Industrials Select Sector SPDRs (Ticker: XLI) declined 44% from 12-11-2000 to 10-09-2002). As the economy weakens it will be interesting to see if the performance of wind energy will be more closely tied to the performance of industrials or the alternative energy sector.

Alternative energy and “going green” has become fashionable with Van Eck, Claymore, iShares and PowerShares issuing ETFs ranging from broad alternative energy to solar, nuclear and wind.

More recent launches:

Vanguard Launches Broad Global ETF
Barclays Global Launches Niche Commodity ETNs
Four New iShares Are Just Following The Trend
Wind Energy ETF Lifts Off
Rydex Launches Specialized ETFs on S&P Industry Sectors

 

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