ETFs going socially responsible
First clean-energy fund set to launch next week
By John Spence, MarketWatch
BOSTON (MarketWatch) -- Now that they've muscled their way into almost every segment of domestic and international markets, the exchange-traded fund business has its sights set on moving into socially responsible investing.
An ETF based on an index of publicly-traded energy companies that focus on environmentally-friendly sources of energy is set to begin trading on the American Stock Exchange on Feb. 4.
The ETF, which will be managed by PowerShares Capital Management, will track the WilderHill Clean Energy Index, a benchmark calculated by the Amex that was launched in August. The Amex collaborated with index provider WilderShares, LLC in developing the index.
The index contains 37 companies that use greener and renewable energy alternatives such as wind, solar, and hydrogen fuel cells.
As of Jan. 27, the top companies in the index were Distributed Energy (DESC: news, chart, profile) , Evergreen Solar (ESLR: news, chart, profile) and Zoltek Companies (ZOLT: news, chart, profile) , according to the Amex.
Socially responsible investing has been gaining steam in recent years with over $29 billion in such funds, according to investment research firm Lipper.
Privately-held PowerShares has over 20 ETFs currently in registration and is trying to establish itself as a major player in the developing business, competing with heavyweights like State Street Global Advisors, Barclays Global Investors and Vanguard Group.
In December the Wheaton, Ill.-based firm rolled out a duo ETFs tied to two of the market's hottest sectors: the PowerShares Golden Dragon Halter USX China Portfolio (PGJ: news, chart, profile) and the PowerShares High Yield Equity Dividend Achievers Portfolio (PEY: news, chart, profile) .
In 2003 PowerShares introduced its first pair of ETFs that attempt to beat market indexes by incorporating elements of active management such as earnings and trading momentum.
The funds, which have higher turnover and fees than similar indexed ETFs, are PowerShares Dynamic Market Portfolio (PWC: news, chart, profile) and PowerShares Dynamic OTC Portfolio (PWO: news, chart, profile) . PowerShares partnered with ETF pioneer the Amex to develop the proprietary indexes.
Cash is King until further notice!!!
My comments on companies are usually my opinion of long term success (years). The PPS may go up or down greatly in the meantime depending on the number of greedy suckers with money.
