Today we are adding some instant diversification to our portfolio, and hopefully some stability. As the market heads into what appears to be a slightly more benign area, at least for the next few months, this investment could provide some small but steady gains for us.
Not only does it give us direct exposure to a handful of expertly chosen greentech plays, it also is a solid bullish play on this subsector generally. I've had a lot of luck investing in ETFs through the years (my top earner this year is a China ETF that has returned 60%).
This one probably won't soar 60% over the next 52 weeks, but I do expect good returns.
Major Holdings... But a Surprise Punch Inside
The investment is the Powershares Cleantech Portfolio ETF (Symbol: PZD). The top 10 holdings of this ETF are generally massive energy concerns:
Top 10 Holdings of the Cleantech ETF
First Solar Inc. 3.25%
SPX Corp. 3.17%
SunPower Corp. 3.14%
Pall Corp. 3.08%
Nalco Holding Co. 3.07%
Siemens AG 3.04%
Corning Inc. 3.03%
Veolia Environnement (ADS) 2.99%
International Rectifier Corp. 2.99%
Trimble Navigation Ltd. 2.98%
However, 37.87% of the index upon which this fund is based is comprised of small-cap growth stocks. That could be why this ETF has been crushing the S&P 500 since inception, as you can see here.
Would You Rather Turn $10,000 into $10,883... or $22,584?
You can see that a $10,000 investment in the S&P 500 about seven years ago would hardly be profitable today. Meanwhile, our Cleantech ETF has been steadily rising since the implosion of 2002... but at a much faster pace the the S&P 500.
Of course, the point of my blog is to recommend great stocks you can use to beat the markets with companies that pay attention to their impact on this earth... and the people living here. So far we've been able to do that... and I think this ETF will continue to help us.
The other good thing here is: we can buy and sell options on this position, which we'll do on occasion. This means we could explode our earnings on this ETF by a factor of 3 or more!
Action: Add the Powershares Cleantech Portfolio ETF (PZD) to the portfolio at $32.54. No trailing stop on this position at this time.
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