ALPS expanded on its thematic exchange traded fund lineup with a strategy that helps investors target the renewable energy category.
On Friday, ALPS launched the ALPS Clean Energy ETF (Cboe: ACES), which has a 0.65% expense ratio.
The ALPS Clean Energy ETF tries to reflect the performance of the CIBC Atlas Clean Energy Index, which is comprised of U.S. and Canadian companies involved in the clean energy sector including renewables and clean technology, according to the fund prospectus.
These companies provide the products and services that enable the evolution of a more sustainable energy sector. The green energy companies are engaged in renewable energy sources, including solar power, wind power, hydroelectricity, geothermal energy, biomass, biofuels, and tidal/wave energy; clean technologies, including electric vehicles, energy storage, lithium, fuel cell, LED, smart grid, and energy efficiency technologies; and other emerging clean energy activities and technologies.
“There is a major transformation underway in the energy sector today. The transition to clean energy is not just about adding more renewables. It’s about cleaner and smarter technologies transforming worldwide production and consumption of energy. This shift is disruptive to traditional sources of energy, but it also presents a compelling and long-lasting investment opportunity for the companies and industries positioned for the change,” according to ALPS.
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The Changing Energy Landscape
The U.S. is currently experiencing a significant long term shift in the electricity and energy sector as we change how energy is produced and consumed. Renewable energy now makes up over 60% of the power sector capacity additions in the US. However, renewables account for 18% of the total US power generation, but the share of investment suggests this sector is poised to accelerate.
ACES’s underlying index includes a 33% tilt toward wind, followed by 18.7% efficiency/LED/smart grid, 15.0% solar, 13.6% biomass/biofuel, 10.0% hydro/geothermal, 5.8% EV/storage and 3.6% fuel cell.
Top holdings include Tesla 5.8%, Covanta Holding 5.3%, Itron 5.3%, Pattern Energy 5.2% and Ormat Technologies 5.2%.
For more information on new fund products, visit our new ETFs category.