Wind ETF: A Less Volatile Alt Energy Fund

Wind ETF: A Less Volatile Alt Energy Fund  – A Seeking Alpha Contribution


  • FAN has considerable exposure to conglomerates and utilities.
  • The balanced portfolio makes for a lower beta.
  • Weakness in Europe and the U.S. wind market are priced in.

Investors have one choice when it comes to a wind ETF: First Trust ISE Global Wind Energy Index Fund (NYSEARCA:FAN). The ETF holds at least two-thirds of assets in firms that exclusively serve the wind energy industry. Companies that have a significant role in the industry make up the other one-third of assets. This split creates a portfolio that is more heavily weighted towards the smaller companies devoted to wind energy, rather than the conglomerates such as General Electric (NYSE:GE) or utilities that are major players in the industry, but for whom wind only represents a small slice of their business.

The biggest source of demand for new wind power remains the Chinese economy. China has to pursue an all-of-the-above energy strategy that includes coal, nuclear, hydro, natural gas, wind and solar, in order to meet its fast rising energy demand…. To continue reading, please click here.

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