By Philip van Doorn, MarketWatch
During this year’s stock market rocket ride, clean-energy ETFs are finally having their day in the sun.
But there has been disparity in performance, so it’s worthwhile to dig further into individual stocks. A list of clean-energy producers, gleaned from the exchange traded funds, is below.
Last week, MarketWatch’s Debbie Carlson covered three of the best-performing alternative-energy ETFs and talked with analysts about why the sector seems to have turned the corner. That’s after years of painful volatility that burned many investors who couldn’t wait through difficult times.
“Playing” the alternative, clean-energy space can mean focusing on actual generators of sustainable electricity, but it can also mean holding shares of various electrical equipment and component makers, semiconductor manufacturers and traditional industrial and energy companies with a newer focus on sustainability. It can even mean electric vehicle manufacturers. Half of the clean-energy ETFs listed below hold shares of Tesla Inc. /zigman2/quotes/203558040/composite TSLA -1.21% .
To help you start your own research into clean-energy ETFs listed on U.S. exchanges, here are a dozen that are traded in the U.S., sorted by assets under management, with various data points provided by FactSet. For comparison, the SPDR S&P 500 ETF /zigman2/quotes/209901640/composite SPY +0.34% is included at the bottom of the list. There is a lot of data — to see all of it, scroll the table at the bottom, to the right.
|Company||Ticker||Assets ($mil)||Expense ratio||Date established||Total return - 2020||Total return - 3 years||Total return - 5 years||Total return - 10 years|
|iShares Global Clean Energy ETF||/zigman2/quotes/205740995/composite ICLN||$1,380||0.46%||6/24/2008||44%||98%||109%||30%|
|Invesco Solar ETF||/zigman2/quotes/210041821/composite TAN||$1,250||0.71%||4/15/2008||87%||179%||135%||-4%|
|Invesco WilderHill Clean Energy ETF||/zigman2/quotes/208932878/composite PBW||$658||0.70%||3/3/2005||66%||157%||193%||44%|
|First Trust Nasdaq Clean Edge Green Energy Index Fund||/zigman2/quotes/205893823/composite QCLN||$474||0.60%||2/8/2007||64%||122%||198%||193%|
|ALPS Clean Energy ETF||/zigman2/quotes/204291195/composite ACES||$359||0.65%||6/29/2018||54%||N/A||N/A||N/A|
|Invesco Cleantech ETF||/zigman2/quotes/204019311/composite PZD||$279||0.65%||12/24/2006||13%||41%||121%||155%|
|First Trust Global Wind Energy ETF||/zigman2/quotes/202847480/composite FAN||$196||0.62%||6/16/2008||17%||38%||94%||107%|
|VanEck Vectors Low Carbon Energy ETF||/zigman2/quotes/209443812/composite SMOG||$144||0.62%||5/3/2007||36%||79%||118%||91%|
|Invesco Global Clean Energy ETF||/zigman2/quotes/202774103/composite PBD||$99||0.75%||6/13/2007||45%||72%||113%||74%|
|First Trust Nasdaq Clean Edge Smart GRID Infrastructure Index||/zigman2/quotes/201178568/composite GRID||$54||0.70%||11/17/2009||12%||30%||104%||127%|
|SPDR S&P Kensho Clean Power ETF||/zigman2/quotes/206089699/composite CNRG||$52||0.45%||10/22/2018||48%||N/A||N/A||N/A|
|Global X Funds Global X YieldCo & Renewable Energy Income ETF||/zigman2/quotes/208624465/composite YLCO||$52||0.65%||5/28/2015||-2%||26%||67%||N/A|
|SPDR S&P 500 ETF||/zigman2/quotes/209901640/composite SPY||0.09%||1/22/1993||4%||40%||88%||250%|
You can click on the tickers for more about each ETF.
Looking at the annual expense column, the clean-energy ETFs look pricey when compared with SPY. Then again, SPY blindly follows the S&P 500 Index /zigman2/quotes/210599714/realtime SPX +0.34% on a market-cap-weighted basis, so it may be a lot more simple to run. Take a look at the performance — most of the clean-energy ETFs have soundly beaten the large-cap benchmark index over the past three and five years, but the index has fared much better if you look back 10 years.
Here are brief descriptions of the dozen clean-energy ETFs:
• The iShares Global Clean Energy ETF /zigman2/quotes/205740995/composite ICLN +0.30% has a portfolio of 30 stocks of companies that produce clean energy through solar technology, biofuels, ethanol, geothermal, hydroelectric or wind, as well as companies that develop technology and equipment used in those fields. Its largest holding, according to FactSet, is SunRun Inc. /zigman2/quotes/205021014/composite RUN -2.51% . The portfolio is weighted by market capitalization.
• The Invesco Solar ETF /zigman2/quotes/210041821/composite TAN +0.06% is concentrated, as its name implies, with “overweight” positions in the U.S. and China, according to FactSet. It is also weighted by market cap. SunRun is the top holding out of 23 stocks.
• FactSet calls the Invesco WilderHill Clean Energy ETF /zigman2/quotes/208932878/composite PBW +0.52% “highly diversified in scope, reaching beyond pure-plays” to include companies in many industries based on their “relevance” to clean energy. The ETF holds 40 stocks. The largest holding is Vivint Solar Inc. , but top holdings also include Tesla.
• The First Trust Nasdaq Clean Edge Green Energy Index Fund /zigman2/quotes/205893823/composite QCLN +0.18% holds shares of 43 companies that make materials used by clean-energy producers or used to reduce reliance on fossil fuels, as well as companies involved in renewable energy production, batteries and storage and “energy intelligence.” The ETF’s top holding is Tesla.
• The ALPS Clean Energy ETF /zigman2/quotes/204291195/composite ACES +0.05% is another diversified cap-weighted ETF with 31 holdings, the largest being Tesla.
• The Invesco Cleantech ETF /zigman2/quotes/204019311/composite PZD +0.27% is equal-weighted, with a global portfolio of 52 stock in various industries connected to clean technologies.