Clean energy stocks have rebounded meaningfully since underperforming earlier in the year, with the ALPS Clean Energy ETF (ACES) recouping all losses from the first half of the year.
ACES has increased 33% over one month and is up 2% year to date, according to VettaFi. For comparison, the S&P 500 has increased 9% in the past month and is still down 11% year to date.
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.
ACES gained 22.37% last month as the clean energy space benefitted from positive earnings, favorable U.S. legislation, and valuation expansion as long-term interest rates steadily declined during the month, ALPS wrote in a recent insight.
The signing into law of the U.S. Inflation Reduction Bill propelled the clean energy space higher, promising lucrative growth opportunities particularly impactful for solar and wind. The U.S. Inflation Reduction Bill will provide roughly $369 billion in policy support across the end-to-end clean energy supply chain. The preliminary details around the climate portion of the bill would support all seven clean energy segments in ACES, according to ALPS.
Top holdings in ACES include Plug Power Inc (PLUG), First Solar Inc (FSLR), Enphase Energy Inc (ENPH), Tesla Inc (TSLA), and Sunrun Inc (RUN).
The fund charges an expense ratio of 55 basis points and has $853 million in assets under management.
Other ETFs offering exposure to the clean energy industry include the First Trust NASDAQ Clean Edge Green Energy Index Fund (QCLN), the SPDR S&P Kensho Clean Power ETF (CNRG), and the iShares Global Clean Energy ETF (ICLN).
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