Alternative energy investors not seeing green yet" is an article that looks to mutual fund
investors who have not yet seen a pay off from their investments in
The stocks of renewable energy companies, such as wind and solar
power providers, have been big losers. The Clean Edge Global Wind
Energy Index, which tracks wind energy stocks, is down about 27
percent over the last 12 months.
That disappointment came as oil company stocks and the Standard
& Poor's 500 stock index both surged about 20
If his goal is to be realized, Obama and his successors will
have to stick with the programs he embraced early in his presidency
to support wind and solar. The government may even have to raise
its commitment, likely through new subsidies that could create
further opportunities for green investors.
Either way, Obama's speech offered comfort to investors left
wondering how long to stick with it.
"The sector is not much loved at the moment," concedes
Edward Guinness, co-manager of the Guinness Atkinson Alternative
Energy Fund (GAAEX).
With a nearly 22 percent loss in 2010, the fund finished last
among 83 funds specializing in energy stocks, according to
Morningstar. The $38 million portfolio was weighed down by solar
and wind energy stocks, most of which fared poorly last year. One
of its biggest holdings, SunPower Corp., fell 46 percent.
Meanwhile, another Guinness Atkinson fund, Global Energy, posted
a nearly 17 percent return last year, thanks to gains for the oil
and gas company stocks it holds. They benefited from an economic
recovery in a world still hooked on fossil fuels.
Meanwhile, solar and wind energy stocks have recently hit
Several European governments face huge deficits that could
jeopardize their traditionally strong support for alternative
energy subsidies. Spain and Italy have already reduced their
backing, and wind and solar stocks have been hurt by fears that
more such cuts are coming.
"That has been this huge ax sort of hanging over the
alternative energy industry, keeping everyone cautious,"
Recently low natural gas prices have reduced the incentive to
convert to solar or wind.
A recent rise in oil prices hasn't yet been enough to
translate to significantly higher costs for electricity generated
from burning fossil fuels, Guinness says.
Still, investors in wind and solar energy stocks may benefit
over the long haul, if they've stuck with it this far.
Volatility is one reason why Morningstar analyst David Kathman
advises most investors keep no more than 5 percent of their
portfolios in alternative energy stocks or funds.
The hope is that over the long haul — meaning several
years — there's more up than down for the stocks.
Guinness figures a shift could come soon: "I'm hoping to
see decent gains in the next 18 months. And in our mind, that is
The article offers some positive and negative stories and tips
in the body of the article, and it is worth a read.
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