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Energy exchange-traded funds (ETFs) invest primarily in stocks of natural gas, oil, and alternative energy companies. The securities within an energy ETF’s portfolio may include major energy companies such as NextEra Energy, Inc. (NEE) and Duke Energy Corp. (DUK), as well as smaller, fast-growing companies in the energy sector. Because the roughly 50 energy ETFs cover a wide variety of business types, regions, and risks profiles, they offer something for nearly every investor. The ETF approach means that investors can gain exposure to the industry without taking on the level of risk inherent in investing in any specific energy company.
The best energy ETF for Q1 2020 is the Invesco WilderHill Clean Energy ETF (PBW). Below, we’ll take a look at the top 3 energy ETFs.
- Performance over 1 year: 57.4%
- Expense Ratio: 0.70%
- Annual Dividend Yield: 0.87%
- 3-Month Average Daily Volume: 75,324
- Assets Under Management: $306.5 million
- Inception Date: March 3, 2005
- Issuing Company: Invesco
PBW follows the WilderHill Clean Energy Index. The fund holds a broad selection of multi-cap clean energy companies, weighted relatively equally. No single holding occupies more than about 4% of the portfolio. The top holdings are Tesla, Inc. (TSLA), the auto maker; Ballard Power Systems, Inc. (BLDP), a maker of fuel cells for heavy machinery and other equipment; and NIO, Inc. (NIO), a Chinese electric car maker.
- Performance over 1 year: 57.0%
- Expense Ratio: 0.45%
- Annual Dividend Yield: 1.07%
- 3-Month Average Daily Volume: 8,489
- Assets Under Management: $21.4 million
- Inception Date: October 22, 2018
- Issuing Company: State Street SPDR
Tracking the S&P Kensho Clean Power Index, CNRG focuses specifically on companies from a mix of market caps and which work to improve efficiency and reduce costs associated with developing clean energy technology. The fund’s top holdings include FuelCell Energy, Inc. (FCEL), the fuel cell company; Tesla, Inc.; and Ballard Power Systems, Inc.
- Performance over 1 year: 56.4%
- Expense Ratio: 0.65%
- Annual Dividend Yield: 1.52%
- 3-Month Average Daily Volume: 23,730
- Assets Under Management: $157.2 million
- Inception Date: June 29, 2018
- Issuing Company: ALPS
ACES uses the CIBC Atlas Clean Energy Index as a benchmark. The fund holds primarily small-cap U.S. and Canadian companies focused on hydro, solar, wind, and other types of clean energy. ACES’ top holdings include Tesla, Inc.; Enphase Energy, Inc. (ENPH), a maker of solar power components; and Brookfield Renewable Partners L.P. (BEP), the Canadian renewable power company.
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