On October 25, PowerShares introduced a new energy-related fund, the WilderHill Progressive Energy Portfolio (PUW). I was curious to see how it stacks up against the PowerShares WilderHill Clean Energy Portfolio (PBW), which I own. My conclusion is that PUW’s portfolio does differ significantly from PBW’s and PUW might warrant another look in a year or so when it has built up some trading history. This fund has significant weight in consumer discretionary and industrial stocks and I believe it is likely to do poorly in the near term if the economy remains sluggish.
PUW is based on the WilderHill Progressive Energy Index. “The Index is comprised U.S. listed companies that are significantly involved in transitional energy bridge technologies, with an emphasis on improving the use of fossil fuels. The modified equal-weighted portfolio is rebalanced and reconstituted quarterly.” PUW’s expense ratio is a reasonable .60.
According to a chart on powershares.com’s website, the index would have outperformed the NASDAQ and the S&P 500 by a wide margin in the last five years, but with a little less volatility. The index has a beta of .92. Of course the results are hypothetical and do not take into account management and transaction fees.
Top ten holdings as of 10/27/2006
Headwaters Inc. 5.17%
Tenneco Inc. 4.69%
Chesapeake Energy Corp. 4.58%
Aventine Renewable Energy 4.46%
Sasol Ltd. 4.18%
ON Semiconductor Corp. 3.87%
Baldor Electric Co. 3.85%
Vicor Corp. 3.82%
Methanex Corp. 3.80%
SunOpta Inc. 3.79%
Other noteworthy holdings include Toyota and Honda Motors. A complete list of stocks in the portfolio is available here: