Is now the time to get back into clean energy investing? The space has offered real opportunities in the past but has dimmed of late. Some point to a glut of EVs, for example, as a marker of an overdrawn space. Of course, so much within clean energy depends on other factors, too. Clean energy investing involves more than just EVs. Other areas like renewable energy sources and clean tech offer continued upside as a medium and long-term play.
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This Fall, especially, rate cuts could provide the kickstart that clean energy needs in the stock market. Both the election and rate cuts could impact the outlook on the space, which also finds itself at the center of a broader domestic manufacturing push. Rate cuts, specifically, could help clean tech firms deal with borrowing costs that skyrocketed at exactly the wrong time for the space.
One strategy to consider that offers a route in may be a fund like the clean energy ETF ACES. ACES, the ALPS Clean Energy ETF, charges a 55 basis point (bps) fee for its services. The fund, which launched back in 2018, tracks the CIBC Atlas Clean Energy Index. Over the duration of its operating period, the fund has gathered $440.7 million in net inflows.
The clean energy ETF’s index takes a market-cap-weighted index approach to the space. The fund targets firms active in renewable energy, clean tech, and other emerging clean energy spaces. While the fund has dipped recently, it could be set to rebound with rate cuts or further government support. What’s more, the strategy could offer a set of exposures that, to some degree, diversify away from software-heavy tech. For those looking for potentially exciting thematic ETFs this Fall, ACES may be worth a closer look.
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