Looking to get exposure to clean energy investing? The space has faced some up and down swings over the last twelve months amid higher interest rates. That has raised the cost of debt, an important piece of the puzzle for many clean tech firms. However, following rate cuts in September, the picture may be brightening. Should that be the case, the ALPS Clean Energy ETF (ACES) could provide a potent option to get into that space.
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ACES launched in June 2018. The strategy charges a 55 basis point fee to track the CIBC Atlas Clean Energy Index. The ETF uses that cap-weighted index to focus on U.S. and Canadian-listed clean energy names. Specifically, it looks for firms active in solar, wind, hydropower, and biofuels as power sources. In terms of technologies, it looks to batteries, smart grids, and, of course, electric vehicles. It places a 5% cap on each stock, too, which could help it avoid too much volatility.
If clean energy investing sees renewed appeal and vigor, ACES could stand out as a route into it. The clean energy ETF sits at $144 million in AUM, per ETF Database data. It’s returned 3.8% since inception. Based on technical data on YCharts, the fund may be seeing green shoots in its momentum. Its price recently rose above its 50-day Simple Moving Average (SMA) of $28.39. Should its $28.95 price rise above its 200-day SMA, too, it could signal some growing appeal.
With the election looming, clean energy could be poised to benefit. Perhaps more important, on a macro basis, debt costs look set to come down. Moving forward, that could make clean energy investing an appealing play, not only on its technologies but also on new energy sources.
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