The Top Five Clean Energy ETFs for Your Portfolio

Tackling Climate Change Through Investments

In the modern age, climate change emerges as a pressing challenge, with the burning of fossil fuels serving as a primary culprit. The energy production sector, reliant on these fuels, is under the microscope. As a response, clean energy solutions have surfaced as powerful weapons to combat this environmental crisis, offering a lifestyle equilibrium – one where we maintain our present comforts while adopting greener energy solutions.

For investors eyeing this green revolution, clean energy ETFs (Exchange Traded Funds) present an opportunity to back emerging sustainable technologies. Dive into our curated list of top five clean energy ETFs, selected after rigorous analysis of numerous parameters like cost efficiency, assets under management, past performances, and market liquidity.

Spotlight on Top Clean Energy ETFs

• iShares Global Clean Energy ETF:

  • Assets Under Management (AUM): $5.86 billion (as of May 26, 2021)

  • Expense Ratio: 0.46%

  • Inception Date: June 24, 2008

    As one of the behemoths in the clean energy ETF sphere, the iShares Global Clean Energy ETF stands out. It offers investors a diversified exposure to clean energy players from around the globe, boasting 112 unique stock holdings. With the most cost-efficient expense ratio among its peers and an impressive three-year return rate, it's a promising contender, though it slightly lags behind the S&P Global Clean Energy Index benchmark. Beyond utility firms, the ETF also ventures into industries pioneering green energy tech, adding layers of diversification.

• Invesco WilderHill Clean Energy ETF:

  • AUM: $1.8 billion (as of May 26, 2021)

  • Expense Ratio: 0.70%

  • Inception Date: March 3, 2005

    Catering to those who seek broad exposure, this ETF envelopes over 60 enterprises immersed in green energy and conservation realms. It casts its net wide, covering companies from pure-play clean energy to ancillaries supporting them, creating a well-rounded investment portfolio.

• First Trust NASDAQ Clean Edge Green Energy ETF:

  • AUM: $2.44 billion (as of May 26, 2021)

  • Expense Ratio: 0.60%

  • Inception Date: Feb. 8, 2007

    Aiming to mirror the NASDAQ Clean Edge Green Energy Index, this ETF offers a panoramic view of the green energy landscape. With assets from an array of sectors in the green energy universe, it assures extensive diversification for its investors.

• Invesco MSCI Sustainable Future ETF:

  • AUM: $470.8 million (as of May 26, 2021)

  • Expense Ratio: 0.58%

  • Inception Date: Oct. 24, 2006

    Beyond mere clean energy, this ETF adopts a more holistic approach to environmental sustainability. It's a potpourri of companies from alternative energy sectors to sustainable agriculture, catering to the eco-conscious investor.

• Global X Renewable Energy Producers ETF:

  • AUM: $125.9 million (as of May 26, 2021)

  • Expense Ratio: 0.65%

  • Inception Date: May 27, 2015

    Tailored for purists, this ETF zeroes in exclusively on renewable energy producers. It might be smaller in scale, but it remains a viable choice for dedicated green investors.

Weighing the Pros and Cons of Clean Energy ETFs

Benefits:

• Venture into a blossoming sector.
• Align investments with ethical values.

Drawbacks:

• Potential gains from fossil fuel investments are sidestepped.
• Choices are relatively limited in the niche clean energy market.

A Glimpse into Historical Performance

Over the years, clean energy has progressively entrenched itself into the U.S. economic fabric. Nevertheless, it's been a roller coaster journey. The industry faced bleak times between April 2011 and July 2012 but rebounded robustly by May 2021. As global focus sharpens on climate change, renewable energy entities are poised for expansive growth, reflecting a promising investment landscape.

Are Clean Energy ETFs Right for You?

Deciding to invest in clean energy ETFs boils down to personal motivations. Whether driven by profitability or a genuine desire to promote sustainable change, ensure the selected ETF aligns with your broader investment strategy.

Final Thoughts

Clean energy ETFs offer a gateway to support and invest in sustainable energy's future. As sustainability continues to gain traction, these investments could carve the path forward in the battle against climate change.

Frequently Asked Questions (FAQs)

• What are clean energy ETFs? Clean energy ETFs champion green energy by investing in firms that either produce sustainable energy or support the clean energy ecosystem.

• How can I delve into clean energy ETFs? Initiate by setting up a brokerage account with renowned firms like Vanguard or Fidelity, fund your account, and you're set to embark on your clean energy journey.

• When's the right time to invest in clean energy ETFs? Timing investments is highly subjective. Assess your financial goals, risk appetite, and market outlook before taking the plunge.