By Mark DeCambre
Happy Thursday: It is even happier for folks investing in alternative energy exchange-traded funds this week. That category of investment funds is starting to gain serious traction higher as an energy crunch leads to spikes in prices of everything from natural gas /zigman2/quotes/210189548/delayed NG00 -0.50% to heating /zigman2/quotes/210062576/delayed HO00 -0.14% and crude oil /zigman2/quotes/211629951/delayed CL.1 +0.26% .
We’ll take a look at some of the best performers.
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The good and…
|Top 5 gainers of the past week||%Performance|
|North Shore Global Uranium Mining ETF /zigman2/quotes/215396693/composite URNM||15.6|
|Global X Uranium ETF /zigman2/quotes/201570425/composite URA||14.4|
|Invesco Solar ETF /zigman2/quotes/210041821/composite TAN||10.5|
|ALPS Clean Energy ETF /zigman2/quotes/204291195/composite ACES||8.0|
|KraneShares CSI China Internet ETF /zigman2/quotes/205873167/composite KWEB||7.1|
|Source: FactSet, through Oct. 13, excluding ETNs and leveraged products. Includes NYSE, Nasdaq and Cboe traded ETFs of $500 million or greater|
|Top 5 decliners of the past week||%Performance|
|AdvisorShares Pure US Cannabis ETF /zigman2/quotes/220307682/composite MSOS||-3.1|
|Communication Services Select Sector SPDR Fund /zigman2/quotes/204079482/composite XLC||-2.5|
|ETFMG Prime Mobile Payments ETF /zigman2/quotes/207941767/composite IPAY||-2.1|
|Vanguard Communication Services ETF /zigman2/quotes/210494949/composite VOX||-2.0|
|Fidelity MSCI Communication Services Index ETF /zigman2/quotes/208532887/composite FCOM||-2.0|
Clean in the green
Clean energy ETFs and other alternative fuel funds are on a mini tear, with at least five of the top 10 funds that ETF Wrap tracks via its screen underpinned by renewable assets.
Invesco Solar ETF , which comprises 46 solar-related companies, including the biggest holdings SolarEdge Technologies Inc. /zigman2/quotes/207754270/composite SEDG -3.54% and Enphase Energy Inc. /zigman2/quotes/207948472/composite ENPH -2.09% , has gained over 10%, so far this week, which is handily outperforming the Energy Select Sector SPDR ETF /zigman2/quotes/206420077/composite XLE -0.22% , up 0.3% so far this week. TAN, referencing the Invesco funds ticker symbol, has an expense ratio of 0.69%, which means that the fund will cost $6.90 annually for every $1,000 invested. (The much larger XLE has a expense ratio of 0.12% and has $25 billion in assets, versus TAN’s nearly $3 billion.)
Other green funds are also getting some shine.
Also in the Invesco suite, WilderHill Clean Energy /zigman2/quotes/208932878/composite PBW -2.51% , which tracks some 70 “clean energy” companies, including Tesla Inc. /zigman2/quotes/203558040/composite TSLA +0.91% , was up 6.3% thus far this week.
The iShares Global Clean Energy ETF /zigman2/quotes/205740995/composite ICLN -2.59% is up 6.8% on the week and ALPS Clean Energy ETF /zigman2/quotes/204291195/composite ACES -2.20% was up sizably too (table attached). We’ve already noted that uranium funds are exploding higher here and here , so we’ll leave it at that.
It is worth nothing that these funds are holding year-to-date losses, of at least 11%, though they are up over the 12-month period.
Hope that the Biden administration can finally push through an infrastructure spending bill is, perhaps, underpinning some of the newfound enthusiasm for clean energy ETFs. However, much of Biden’s economic initiatives, including infrastructure, are stalled in Congress because of divisions within the Democratic Party about spending, according to reports .
The crunch for energy that has caused a surge in fossil fuels is prompting a hunt for alternatives. Natural gas futures were trading around a seven-year high last week and U.S. oil futures for oil are near their highest level since 2014.
ProShares Ultra Bloomberg Natural Gas /zigman2/quotes/210336898/composite BOIL -4.75% , which offers exposure to the hot commodity is up over 270% year-to-date and nearly 100% over the past 12 months.
BlackRock’s new ETF
As all eyes are on 10-year Treasury yields /zigman2/quotes/211347051/realtime BX:TMUBMUSD10Y +6.04% and the potential for the Federal Reserve to announce the start of tapering of its monthly asset purchases, BlackRock is rolling a new bond fund.
The iShares USD Bond Factor ETF tracks the BlackRock USD Bond Factor Index, and picks bonds that are underpriced relative to peers and exhibit lower probabilities of default, “using the quality and value stylefactors alongside macro factors.” For clarity, “factor” investing is built according to specific, predetermined characteristics of an asset such as value, growth, large-capitalization, or small-capitalization, to name a few.