In full disclosure, I own shares of the ETF FAN and may continue to buy additional shares at or below the current price of 15.5, but not at higher prices. This is not a recommendation to buy or to sell. Trade at your own risk, and perform research about this security by reading the information available on this ETF at the First Trust web site. Consult with your financial advisor prior to making any purchase. In this blog, I am merely describing my reasons for purchasing this security and the potential pitfalls that I identified prior to purchase. This security may not be suitable for others based on their unique financial position and risk profile. For more information about wind energy seeWind Power News - The New York TimesAmerican Wind Energy AssociationBloomberg.com: EnergyThe Energy Challenge - Wind Energy Bumps Into Power Grid’s Limits - Series - NYTimes.com
Tuesday, October 14, 2008
FAN: ETF GLOBAL WIND ENERGY STOCKS
I stuck another toe in the water by buying another non-dividend paying stock. This last buy was a nibble of 50 shares of FAN at 15.76. This is an ETF containing stocks from around the world involved in wind energy. The sponsor is First Trust and this is a link to the web page. First Trust - www.FTPortfolios.com The expense ratio is high for an ETF at .6% currently, which will rise to .87% in June 2010. Shares of this ETF were sold at $30 in June 2008 and I took a pass on it then. By buying at about half the IPO price a few months later after a 50% correction, I feel like being ahead by being even. Even with the fall in oil prices, I am positive about this sector longer term but I am not familiar with most of the companies in this ETF. At best, I have a small degree of information on about 10 of them so I just opted for a small position in the ETF. Congress did extend the production tax credit for wind energy for another year in the recent bailout bill. Wind, Solar Tax Credits Extended in $700 Billion Bail-Out I would anticipate more political support for the development of alternative energy sources in the next administration.
When writing these blogs, I just view myself as an unpaid financial journalist.