LIT Global X Lithium and Battery Tech ETF

With a modestly improving economic environment, it appears as though businesses are slowly starting to hire while consumers are once again opening up their pocketbooks. While this trend has led to some optimism across the economy, one downside to this increased demand from a variety of sectors looks to be in the commodity world.

A number of products have seen rising prices so far this year with some of the biggest gains coming in the energy world. Oil prices are now firmly above $100/bbl. while coal, heating oil, and RBOB have all seen price increases in the first part of the year as well.

If these positive economic trends continue, high prices in this segment could be in the beginning of a bull market, if not at the very least poised to stay at elevated levels for the time being (see Inside The Forgotten Energy ETFs).

This development could boost demand for those engaged in the exploration and production of new fossil fuel areas as higher prices make fields that were once off limits profitable again. Another end result of this trend could be renewed interest in alternative fuels such as wind and solar power.

These energy forms tend to be much more competitive with their ‘traditional’ cousins when prices are high in the hydrocarbon world, spurring some to make the switch to clean energy. Yet, while exploration for new deposits and the broad clean energy sector look to be winners, investors could also see huge gains in stocks that promote energy efficiency as well.

Companies in this segment could be key components in a time of high energy prices, helping to stretch supplies in all forms of energy. By utilizing these techniques offered by some firms in this corner of the market, companies can cut down on costs and possibly become more profitable in the process. Seemingly, a commitment to energy efficiency by power intensive businesses could be a competitive advantage in times of high prices (read Three ETFs For An Iranian Crisis).

As a result, it could be ideal for some investors to consider making a play on this space for investment. While it is true that a move into broad clean energy or oil firms could be another way to play high prices, both of these sectors look to be among the first places that investors target with their capital in times of rising energy prices, suggesting that energy efficiency firms may be overlooked in comparison.

Thanks to this, valuations in this corner of the market may be more tolerable at this time than most other plays on the growing trend. Furthermore, the sector looks to be less volatile, and more profitable, than many in the alternative energy space while also offering more growth than many oil firms, implying that it could be the best of both worlds if energy prices remain elevated.

For investors intrigued by these trends, any of the following three ETFs could make for intriguing selections that could possibly benefit from a boom in demand for energy efficient technologies and processes:

PowerShares Cleantech ETF (PZD