Over the past few years, the number of ETFs tracking the alternative energy industry has soared; what was once just a few funds targeting broad equity and bond markets has now branched out into a diversified mix of ETFs offering exposure to almost every conceivable corner of the investable asset universe. One excellent example of this trend is the clean energy space, which is now the subject of dozens of exchange-traded products. This boom in clean energy ETFs comes as economies around the world attempt to transition to cleaner burning fuels and alternative energy, giving investors ample opportunities to profit from the technological shift. However, many clean energy funds haven’t lived up to expectations thus far and have only acted as a drag on portfolio returns. Although general weakness in the economy and a moderating price of oil has not helped, many emerging technologies are beginning to run into a new and interesting problem that threatens to hold back the entire clean energy industry. [click to continue…]
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