Best Alternative Energy ETFs for Q1 2020

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Alternative energy companies, which sell or use everything from solar energy to hydrogen to electric batteries, aim to make a profit by transforming the way societies power themselves. This is happening amid rising global concern about climate change, and also amid longterm forecasts of dwindling fossil fuel supplies. Alternative energy ETFs track individual companies like oxide fuel cell maker Bloom Energy Corp. (BE) and hydrogen power firm Plug Power, Inc. (PLUG) or indexes of alternative energy companies. Many of the businesses in this industry are largely untested and inherently risky additions to a portfolio on their own. But an ETF can offer potentially lower-risk access to the sector. There are 11 ETFs focused on alternative energy, excluding leveraged and inverse funds. The best alternative energy ETF, based on 1-year performance, is the ALPS Clean Energy ETF (ACES). We examine the top 3 alternative energy ETFs below.

  • Performance over 1 year: 53.4%
  • Expense Ratio: 0.65%
  • Annual Dividend Yield: 1.56%
  • 3-Month Average Daily Volume: 22,589
  • Assets Under Management: $152.5 million
  • Inception Date: June 29, 2018
  • Issuing Company: ALPS

ACES follows the CIBC Atlas Clean Energy Index, an index of small-cap alternative energy companies based in the U.S. and Canada. Currently, ACES’ top holdings include Tesla, Inc., solar power company Enphase Energy, Inc. (ENPH), and renewable power plant outfit Ormat Technologies, Inc. (ORA).

  • Performance over 1 year: 52.0%
  • Expense Ratio: 0.70%
  • Annual Dividend Yield: 0.86%
  • 3-Month Average Daily Volume: 72,957
  • Assets Under Management: $299.7 million
  • Inception Date: March 3, 2005
  • Issuing Company: Invesco

This ETF tracks the WilderHill Clean Energy Index, providing exposure to multi-cap U.S. companies engaged in the business of advancing cleaner energy and energy conservation. As of February 9, 2020, PBW’s top holdings including outside-the-box car maker Tesla, Inc. (TSLA), fuel cell company Ballard Power Systems, Inc. (BLDP), and Chinese electric vehicle company NIO, Inc. (NIO).

  • Performance over 1 year: 52.4%
  • Expense Ratio: 0.71%
  • Annual Dividend Yield: 0.26%
  • 3-Month Average Daily Volume: 201,916
  • Assets Under Management: $543.3 million
  • Inception Date: April 15, 2008
  • Issuing Company: Invesco

This ETF tracks the MAC Global Solar Energy Index, comprised of multi-cap companies involved in all aspects of the solar energy industry and based around the world, though primarily in the U.S. and China. TAN’s top holdings Solaredge Technologies, Inc. (SEDG), a maker of components for photovoltaic arrays, Enphase Energy, Inc., and First Solar, Inc. (FSLR), a provider of solar panels, power plants and more.

Source: Investopedia

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