As I do my research to find the cutting edge companies in alternative energy I often run across very exciting ideas from companies that do not have their stock traded on U.S. exchanges. As an individual investor I have neither the resources or knowledge to buy stocks on foreign exchanges, so I was very interested in learning about the WilderHill Global New Energy Innovation Index, here after referred to as NEX.
The NEX consists of companies throughout the world with innovative technologies for the advancement of energy conservation, clean energy and renewable energy. The index currently consists of 88 companies in 21 countries listed on 25 stock exchanges. The index is biased towards pure plays and at least 50% of the companies must be based outside of the U.S. Here are some of the pertinent facts about NEX:
- Largest market cap: $73 billion; smallest: $124 million; median: $1.2 billion.
- Max index percentage for any stock: 2.5%, 10 largest holdings equal 25% of index, NEX is rebalanced quarterly
- Weighted distribution by region:
- Europe, Mideast & Africa: 48.3%
- Americas: 34.0%
- Asia & Oceania: 17.7%
- Top sectors by weighting:
- Renewable-Wind: 27.2%
- Renewable-Solar: 22.9%
- Renewable-Biosources: 12.0%
- Six other sectors for the remaining 38%
- Annualized returns: One year: 51.2%, Three years: 36.9%
As an investor you cannot invest in an index, which NEX is, so how do we get some NEX? The answer is with a tracking exchange traded fund i.e. ETF, that tracks the index. Many ETFs track many of the multitude of indexes currently available and NEX has one too. NEX is mirrored by the PowerShares Global Clean Energy ETF, symbol PBD. PBD has been in existence since the end of June and here is a chart of its performance relative to NEX.
For more information on NEX check here.
this article is for information purposes and not advise to buy or sell any securities
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