"Of Mutual Interest"-Jason Zweig, Investing Columnist for "Money" Magazine and Author of "Your Money and Your Brain"
Tuesday, April 22, 2008PAUL KANGAS: In tonight's "Of Mutual Interest" segment, since it's Earth Day, we look at green funds. Joining us again, our mutual fund master Jason Zweig, investing columnist for "Money" magazine and author of "Your Money and Your Brain." Jason, welcome back to NBR.
JASON ZWEIG, AUTHOR, "YOUR MONEY AND YOUR BRAIN": Thanks, Paul, good to be with you.
KANGAS: Is it possible to buy into a fund that only invests in environmentally conscious companies?
ZWEIG: It is, Paul. There's an increasing number of exchange-traded funds or ETF's that invest almost exclusively in funds, in stocks that either clean up the environment or don't contribute to pollution and we'll talk about several.
KANGAS: All right. Well let's take a look at a few examples. First we have an ETF called WilderHill I believe it's pronounced, WilderHill clean energy. Tell us about that.
ZWEIG: Yes. That's -- the ticker symbol there is PBW and this is a fund that invests partly in companies that clean up the environment and then partly in companies that don't make it worse. So you get a mix of both. And it's been quite volatile. It was up, oh roughly 60 percent last year and down maybe 15 or 20 percent this year. So it's going to be a rough ride in funds like these.
KANGAS: What is the main influence to cause that volatility?
ZWEIG: Well, a lot of the alternative energy stocks, Paul, got very highly valued last year and went to extreme evaluations in the marketplace. And some of that air has come out in 2008.
KANGAS: There are other ETF's doing clean energy as well, correct.
ZWEIG: Yes. There's another called Power Shares Cleantech. The ticker symbol there is PZD and that one specializes primarily in companies that increase productivity either through cleaning up the environment or simplifying industrial processes. It too is pretty heavily concentrated in the major holdings in the funds so it's pretty volatile too.
KANGAS: There are two brand new exchange traded green funds, one less than a week old and one out just today. Tell us about those.
ZWEIG: Yes, we've got two solar funds, Paul.
KANGAS: There you go.
ZWEIG: I'm going to put my shades on. The first is called Claymore Global Solar and the ticker symbol is TAN and the second is market vector's solar energy fund that came out today for Earth Day. The ticker symbol KWT as in kilowatt, I guess. And what both of these funds do is specialize in stocks promoting or creating solar energy and making that technology.
KANGAS: You've made that very clear with those glasses on, thank you. Jason, would you invest in any of these funds?
ZWEIG: You know, Paul, I would be very hesitant for the simple reason that alternative energy stocks and solar stocks in particular were so hot last year, you know. The ticker symbol is TAN but you've got to be careful you don't get burned on these.
KANGAS: Oh boy.
ZWEIG: I'd wait until, I'd wait until people aren't quite so enthusiastic about them before I jumped in.
KANGAS: Jason, very interesting information. And thank you for giving your input today.
ZWEIG: Great, thank you, Paul. Glad to be with you.
KANGAS: My guest, Jason Zweig, investing columnist for "Money" magazine and author of "Your Money and Your Brain."
