Wednesday, November 18, 2009

Reviewing the New Smart Grid ETF (GRID)

Following up on yesterday's "First Trust Rolls Out Electric-Grid-Linked ETF (GRID)" , 24/7 Wall Street has this:
If you thought you might not see another green energy or less-dirty energy exchange traded-fund, there is a new ETF for you. First Trust Advisors is launching the First Trust NASDAQ Clean Edge Smart Grid Infrastructure Index Fund of the First Trust NASDAQ Clean Edge Smart Grid Infrastructure Index Fund (NASDAQ: GRID) today. So far we are seeing a gain in the ETF by 0.8% to $30.39, but on fairly thin trading volume of about 134,000 shares as of 11:20 AM EST. We have seen many other green ETFs, but this is actually the first designated ETF or ETN that is geared solely toward the smart-grid rather than just to green energy. There will be some overlaps in this ETF with others, but that is often the case.

This ETF aims to track equity index called the NASDAQ OMX Clean Edge Smart Grid Infrastructure Index, which is designed to act as a “transparent and liquid benchmark” for the grid and energy infrastructure sector. The most interesting aspect of this is that it may highlight which individual companies are making leaps and bounds here in the smart grid. As you might expect, there are many overlaps in here with the other clean or green ETF products via the PowerShares Global Clean Energy (NYSE: PBD), PowerShares Cleantech (NYSE: PZD), PowerShares WilderHill Clean Energy (NYSE: PBW), and the First Trust NASDAQ Clean Edge Green Energy (NASDAQ: QCLN).

The Index is a modified-market cap weighted index and includes companies that are “primarily engaged and involved in electric grid, electric meters and devices, networks, energy storage and management, and industry-related software.” The index is also jointly owned by the NASDAQ OMX Group, Inc. (NASDAQ: NDAQ) and Clean Edge, Inc....MORE