So, what is a Miscellaneous Sector ETF? Here’s how Morningstar defines this sector: “Miscellaneous sector portfolios invest in specific sectors that do not fit into any of Morningstar’s existing sector categories and for which not enough funds exist to merit the creation of a separate category.” This category mostly contains ETFs that specialize in alternative energy, clean technology and water related companies. Some of the newer ETFs in this category are focused on new or exponential technologies. There are currently 25 ETFs in this category. Fourteen of these ETFs have been available for 10 years or longer. These older 14 ETFs will be the focus of this article.
The oldest ETF in the Miscellaneous Sector category is the Invesco WilderHill Clean Energy ETF (PBW). As with most of the ETFs in this category, PBW has not performed very well vs an S&P 500 index fund. The ETFs that are focused on water related companies have done well, but the alternative energy ETFs have struggled.
PBW vs S&P 500 index fund: April 2005 – February 2019
Source: https://www.portfoliovisualizer.com/
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