ACES Handily Outpaces WilderHill Clean Energy Index YTD | ETF Trends

Momentum in the clean energy space continued in August with the Biden administration officially signing the Inflation Reduction Act (IRA) into law, which includes many clean energy incentives, propelling the ALPS Clean Energy ETF (ACES) ahead.

ACES gained 5.90% in August 2022, outpacing the WilderHill Clean Energy Index (ECO) in a month that saw all but one segment in the green as ACES continued to handily outpace ECO year-to-date, ALPS wrote in a recent insight. 

Year-to-date through August 31, ACES has returned -1.31% while ECO has returned -20.15%, according to ALPS. Over a one-year period, ACES has returned -9.95% and ECO has returned -29.54%, as of the end of August. 

ACES tracks a market-cap-weighted index of North American companies involved in the clean energy industry. The index provider targets companies that enable the evolution of a more sustainable energy sector, and includes activities such as renewable energy sources (solar, wind, hydropower, biofuels), clean technologies (electric vehicles, battery technology, fuel cells, smart grids), and any other emerging clean energy technology.

“Uniquely, ACES pure-play methodology offers exposure to only U.S. and Canadian companies across seven distinct clean energy segments that will all benefit from the IRA tax credits,” the firm wrote in the insight.

The U.S. Inflation Reduction Act marks a major step forward in the energy transition away from fossil fuels and places the U.S. at the forefront of clean energy initiatives that will unequivocally lead other major nations to put in place more specific initiatives, ALPS wrote. 

Following the enactment of the Inflation Reduction Act into law, in August, Fuel Cell/Hydrogen was ACES best-performing segment during the month, while Electric Vehicles (EV) was the laggard, ALPS wrote.

Other clean energy ETFs to consider include the SPDR S&P Kensho Clean Power ETF (CNRG) and the First Trust NASDAQ Clean Edge Green Energy Index Fund (QCLN).

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