ETFs to Play Alternative Energy Resources

ETF Trends

After years of underperforming the broader markets, alternative energy related exchange traded funds are making a turnaround.

The Guggenheim Solar ETF (TAN) is up 8.3% over the past week and 55.5% higher year-to-date. [Solar ETF Rallies Over 50% in a Month]

The fledgling solar energy industry has gone through some growth pains as it witnessed high volatility on prospects of high supply and low demand. However, growing global is improving and companies are finding better financing, reports Claudia Assis for MarketWatch.

Recently Goldman Sachs announced a financial deal with SolarCity (SCTY) for $500 million, and the investment manager plans to invest $10 billion into alternative energy over the next decade, according to the Motley Fool.

However, Mahesh Sanganeria, an analyst with RBC Capital, warns that a correction in the next few months is “a good possibility.”

“The question is what would trigger it?” Sanganeria asked in the MarketWatch article.

The United States Natural Gas Fund (UNG) gained 7.7% over the past week and is up 21.4% year-to0date.

Gas prices have been moving higher on the hotter-than-normal weather across the U.S. as utilities companies burned the fuel to meet electricity demand, Fox Business reports. Looking ahead, traders are watching out for the summer heat.

Nevertheless, natural gas stockpiles rose to 89 billion cubic feet in the week ended May 17, but it was below historical averages for the week.

The Market Vectors Uranium & Nuclear Energy ETF (NLR) gained 2.2% over the past week and increased 5.4% year-to-date. [ETFs for a Revival in Nuclear Energy]

The nuclear industry took a severe blow after the catastrophe in Japan, but the International Atomic Energy agency believes that “the Fukushima Daiichi accident is expected to slow or delay the growth of nuclear power, but not reverse it,” according to Money Morning. The IAEA projects growth of between 23% and 100% in nuclear power capacity by 2030, with the major activity in the emerging markets.

For more information on the alternative energy sector, visit our alternative energy category.

Max Chen contributed to this article.

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Mr. Lydon serves as an independent trustee of certain mutual funds and ETFs that are managed by Guggenheim Investments; however, any opinions or forecasts expressed herein are solely those of Mr. Lydon and not those of Guggenheim Funds, Guggenheim Investments, Guggenheim Specialized Products, LLC or any of their affiliates. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.

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