Fewer Carbon Emissions in 2023 Should Benefit This ETF

The expansion of clean energy technology made a tangible impact in 2023, according to data from the International Energy Agency. This could be a persisting trend, benefiting like the ALPS Clean Energy ETF (ACES).

From the decelerating costs of obtaining clean energy technology leading to more mass adoption, carbon emissions have fallen worldwide. From solar power to increased use of electric vehicles, clean energy technology appears poised to continue reducing emissions, and thus meet countries’ respective goals if this trend continues.

“Global energy-related carbon dioxide (CO2) emissions rose less strongly in 2023 than the year before even as total energy demand growth accelerated, new IEA analysis shows, with continued expansion of solar PV, wind, nuclear power and electric cars helping the world avoid greater use of fossil fuels,” a Climate Action report noted. “Without clean energy technologies, the global increase in CO2 emissions in the last five years would have been three times larger.”

ACES’ top holding as of March 1 is solar power company Enphase Energy. The stock is accumulating investment capital from institutional sources, which is a positive sign for the Enphase stock holders, including ACES.

“Because institutional owners have a huge pool of resources and liquidity, their investing decisions tend to carry a great deal of weight, especially with individual investors,” Simply Wall Street said. “Therefore, a good portion of institutional money invested in the company is usually a huge vote of confidence on its future.”

Clean Energy Growth in One Fund

Given the strong growth trajectory of clean energy, especially with respect to technology, investors can get broad-based exposure via ACES. The fund seeks investment results that correspond generally to the performance of its underlying index, the CIBC Atlas Clean Energy Index (NACEX).

ACES delivers exposure to a diverse set of U.S. and Canadian companies involved in the clean energy sector, including renewables and clean technology. The sector comprises companies that provide products and services that enable the evolution of a more sustainable energy sector.

To achieve all-encompassing exposure to clean energy growth, the fund is deeply diversified. This includes exposure to companies specializing in EVs, wind, and solar power. Those three areas make up the majority of the fund, but investors also get exposure to nascent technologies such as hydro/geothermal and bioenergy solutions.

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