High energy prices have reignited positive clean energy sentiment, propelling ETFs offering exposure to the energy transition higher.
The ALPS Clean Energy ETF (ACES) rallied earlier this month as high energy prices, resulting from the Russia-Ukraine conflict and ensuing sanctions, have global governments scrambling for alternative energy solutions, according to ALPS.
The electric vehicle companies included in ACES – comprising 28.49% of the fund – rose over 2% after the Biden administration invoked The Defense Production Act with $750 million to boost U.S. production of materials needed for EVs and EV infrastructure, ALPS wrote in an insight.
A potential cease-fire in the Russia-Ukraine war last week was also positive for EV names as Russia accounts for nearly 20-30% of global nickel and palladium production that goes into lithium-ion EV batteries, according to Mining.com.
Top-performing holdings include Workhorse Group Inc. (WKHS, 0.52% weight), an EV and electric aircraft developer, which gained nearly 10% on the cease-fire news, as well as EV charging company, Chargepoint Holdings Inc. (CHPT, 3.78% weight), which gained nearly 7% on continued partnerships. V giant, Tesla Inc. (TSLA, 5.64% weight), also gained 7% after announcing a future stock split two weeks ago.
The hydro/ geothermal holdings in ACES have also risen, propelled by Brookfield Renewable Partners LP. (BEP-U CN, 4.83% weight) gaining over 3% after inking a $300 million investment agreement with Entropy Inc. to scale its carbon capture technology, according to ALPS.
Geothermal energy developer, Ormat Technologies Inc. (ORA, 3.06% weight), jumped nearly 5% the week of April 1 following positive commentary from the company’s investor day, where management cited “massive potential” for geothermal growth in the U.S, according to ALPS.
ACES’ largest holdings include Enphase Energy (5/68%), Tesla (5.64%), Plug Power (5.36%), First Solar (5.10%), and Sunrun (5.05%), according to ETF Database.
Other funds offering exposure to the energy transition 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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