Van Eck is the latest ETF sponsor to hit the market with a fund positioned to benefit from the interest in alternative energy.

The Market Vectors Global Alternative Energy ETF (NYSE:GEX) captures two hot trends -- alternative energy and global investing -- in one convenient fund.

GEX is based on the Ardour Global Index (Extra-Liquid) which contains 30 alternative energy stocks from all over the world. To be included in the index, stocks must have a market cap exceeding $100 million, sport a trading price greater than $1, and be significantly involved in the alternative-energy industry. Stocks are selected from five areas: alternative-energy resources; distributed generation; enabling and environmental technologies; and energy efficiency. The index is reconstituted on a semiannual basis and is capitalization-weighted.

Global exposure
GEX currently has exposure to 16 different countries, with the U.S. accounting for 42% of assets and Germany the next highest at 14%. A Danish company, Vestas Wind Systems is the fund's top holding at nearly 11%. Rounding out the top three holdings are a Spanish company -- Gamesa, a specialist in wind turbine and wind farms -- at roughly 8% of holdings, and Norwegian solar energy company Renewable Energy, which accounts for roughly 7% of assets.

Competitive advantages
Unlike its peers, GEX is more evenly distributed across large-, mid-, and small-cap stocks (at 31%, 42%, and 27%, respectively) and has invested more than half its assets outside the U.S. In addition, GEX has a 0.65% expense ratio that is in the range of the 0.60%-0.65% fees charged on similar funds.

Fund risks
An investment in GEX involves certain risks, including the fact that it is not a broadly diversified fund and has a narrow focus. Because the index that GEX tracks has a beta of 2.28, it's reasonable to expect a much higher degree of volatility than you would get from a broad market tracker. The fund is also subject to the usual risks of investing in non-U.S. stocks, including political and economic instability. GEX is also a new and untested fund, so it might be best to let it season a bit before investing.

It's easier to be green
Now that there are a handful of ETFs that focus their investments in the alternative-energy area, it's much easier to be a green investor. GEX has the advantage of being more globally focused than its competitors, making it well-positioned to compete against other funds in this area.

Fool contributor Zoe Van Schyndel lives in Miami and enjoys the sunshine and variety of the Magic City. She does not own any of the funds or securities mentioned in this article. The Motley Fool has a disclosure policy.