Strong earnings reports from key companies in the Green Economy sparked a rally in the NASDAQ OMX Green Economy Index (QGREEN) this week, leading equities markets higher. Meanwhile, silver and gold remained under pressure with the PHLX Gold/Silver Sector Index (XAU), a measure of gold and silver mining stocks, dropping 3.8%.

”Precious metals have experienced volatile trading this week, dropping to its lowest level in two and a half years,” said Dave Gedeon, Managing Director, NASDAQ OMX Global Indexes. “Changing inflation expectations and sustained strength in the U.S. Dollar has curbed the demand for gold and silver as a long-term investment vehicle.” 

For a look at the top weekly index movers, top five equity indexes, top five commodity indexes and other notable index moves, click here.

Index Universe named the First Trust NASDAQ Clean Edge Green Energy ETF (NASDAQ: QCLN) and the iShares NASDAQ Biotechnology Index Fund (NYSEArca: IBB) two of the best ETFs in 2013. According to the publication, QCLN  is challenging the db X-trackers MSCI Japan Hedged Equity ETF (NYSEArca: DBJP) for first position in a tally of top-performing ETFs year-to-date, with gains of 37.3 percent, and all of that linked to shares of Tesla, the luxury electric sports car maker. QCLN is based off of the NASDAQ Clean Edge Green Energy Index. 

2012-2013 are big years in the transition to a Green Economy, though mainstream media headlines may not reflect it. While many focus on the boom in natural gas, the growth in wind and solar are certainly deserving of similar headlines. Record-breaking installations over the past few years have boosted renewable energy as the supplier of almost 16% of U.S. electrical generating capacity, more than nuclear and oil combined.

In March 2013, renewable energy accounted for 100% of all new electrical capacity in the U.S., and 82% for the first quarter as a whole. 1546 megawatts (MW) of renewables came online, compared to 340 MW of natural gas — according to the Federal Energy Regulatory Commission (FERC), in the form of six wind farms (958 MW), 38 solar farms (537 MW) and 28 biomass plants (46 MW). The solar added is more than double that of the first quarter last year. In 2012, renewables accounted for almost half of all new electrical generating capacity — 46.22%. And this doesn’t count the growth of small rooftop solar systems.

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Written by: Rona Fried, Ph.D. is CEO of SustainableBusiness.com, providing green business news and green jobs online since 1996. She builds the universe of eligible components based on the index methodology for NASDAQ’s Green Economy Index.

The Green Economy, broadly comprised of companies committed to renewable energy production, energy management, sustainable farming, resource harvesting and other segments, saw its last peak in price valuation at the end of 2007. This sector performance was extremely strong, showing outsized gains versus the broad market in the equity rally of 2005 to 2007.

While the market as a whole severely declined in 2007 and 2008, the Green indexes lost an even larger percentage of value than other sectors. Between June 2008 and June 2009 the NASDAQ U.S. Benchmark index (NQUSB) went down 27.43% while the NASDAQ Green Index (QGREEN) decreased 36.18%. NQUSB recovered and has gained nearly 75% since June 2009, while the Green index gained 46.83%. However, some sectors within the Green Economy continued to decline; the NASDAQ OMX Generation Index (GRNREG) lost an additional 41.88% after the broad equity market bottom in March 2009.

During that time, losses continued and outflows on green-related exchange-traded products (ETPs) increased, even as broad market equities were gaining significantly.

Just recently though a sliver of green has been seen in the index performance of the green sectors and it appears a bottom has finally been achieved. September 2012 marked the lowest point for the broad Green index and many of its sector indexes. Since that lowest level, the indexes have strongly rallied:

Many of the indexes within the broad green economy are now outperforming the broader U.S. market.

World Water Day brings awareness to our most precious natural resource, so it’s only fitting that we highlight the NASDAQ OMX U.S. Water Index, which tracks companies who conserve,purify, treat and distribute water.

The NASDAQ OMX U.S. Water Index (GRNWATUSL) has 26 of its 28 companies tracking positive returns from the start of this year through 3/20/2013. In that same period, the index has also outperformed the S&P 500 by 2.35%. Year-over-year GRNWATUSL beat the S&P 500 by 11.5%.

While the water segment was hit hard by the financial crisis, the NASDAQ OMX U.S. Water index has fully recovered and is now hitting all-time highs*. The risk factors for the index have also begun to diminish, with 3-month volatility at its lowest levels since 2007– going below 15% in October 2012 and averaging 13% to date through 2013. The realized volatility of the U.S. Water index is now in line with the broader market, something that has not been seen for some time.