While volatile oil prices have taken much of the spotlight in the energy sector this year, increasing global energy security concerns amid geopolitical tensions, soaring data center energy demand, and substantial international investment have propelled clean energy ETF gains in 2026.
Key Takeaways
- Clean energy ETFs have delivered significant returns this year, often outperforming broad market benchmarks and falling in line with energy sector benchmarks, driven by geopolitical tensions, increasing international investment, and the surging power needs of AI data center projects.
- After a period of strong performance and a capital rotation into alternative energy sectors in late May, clean energy valuations cooled in June as oil prices began to stabilize and geopolitical pressures show signs of de-escalation. However, trading remains well above 2025 levels.
- Investors have a wide range of options to capture the energy transition, with funds offering targeted exposure to specific technologies, subsectors, and grid infrastructure, allowing for both diversified and pure-play approaches to clean energy investment.
The Resurgence of Clean Energy Investment
Following a multi-year slump in clean energy ETF performance, geopolitical tensions sparking global energy security concerns and energy demand from AI data center projects have driven clean energy investment in 2026.
The global energy transition investment reached a record $2.3 trillion in 2025, up 8% from 2024, and for the second consecutive year, clean energy deployment has outpaced fossil fuel supply, according to analysis from Bloomberg.
Clean energy ETFs saw a surge in late May as investors rotated capital into alternative energy sectors while geopolitical tensions constrained global energy supplies and sent traditional fossil fuel markets into a frenzy. However, as oil prices begin to revert toward normal levels amid stabilizing geopolitical tensions, valuations have cooled from 2026 highs, despite trading remaining at levels significantly higher than in 2025.
Gains in Global Clean Energy
The iShares Global Clean Energy ETF (ICLN) tracks the performance of the S&P Global Clean Energy Index, providing passive market-cap weighted exposure to approximately 100 companies involved in renewable energy generation and clean energy-related technologies. ICLN has climbed over 20%, and has received inflows of $507 million so far in 2026. Also using a market-cap-weighted approach, the Fidelity Clean Energy ETF (FRNW) tracks the Fidelity Clean Energy Index, targeting global companies that derive at least 50% of their revenues from renewable energy. The fund has seen a return of 17.3% and inflows of $60 million this year.
Taking a modified equal-weight approach, the Invesco Global Clean Energy ETF (PBD) follows the performance of the WilderHill New Energy Global Innovation Index. The index requires that at least 50% of the fund’s assets are invested internationally, prioritizing firms involved in the advancement of cleaner energy and conservation. PBD has climbed 19% and recorded inflows of $6.5 million in 2026.
Capturing the North American Energy Shift
Taking a more U.S.-focused approach, the Invesco WilderHill Clean Energy ETF (PBW) tracks the WilderHill Clean Energy Index. This index targets U.S. companies involved in the clean energy transition, with the fund’s equal-weighting methodology providing increased exposure to smaller-cap names in the industry. The fund has climbed 20.6% this year with outflows of -$305.2 million as surging Treasury yields and potential interest rate hikes pressure smaller-cap holdings.
Pivoting away from pure power generation, the First Trust NASDAQ Clean Edge Green Energy Index Fund (QCLN) tracks the NASDAQ Clean Edge Green Energy Index targeting North American companies across the green value chain. The fund allocates a large portion of holdings toward the technology, EV, and semiconductor sectors that enable the energy transition, alongside traditional clean energy producers. The fund has grown 27.2% this year and received inflows of $110 million.
Similarly, the ALPS Clean Energy ETF (ACES) and the ALPS Electrification Infrastructure ETF (ELFY) both provide North American exposure to the clean energy sector. ACES tracks the CIBC Atlas Clean Energy Index, spreading holdings across seven clean energy subsectors including solar, wind, energy management & storage, fuel cells, hydro/geothermal, EV/transportation, and bioenergy. Focusing more on the electrification infrastructure component of the clean energy transition, ELFY tracks the Ladenburg Thalmann Electrification Infrastructure Index, providing exposure to the companies physically supplying electricity and grid infrastructure. This year, the funds have returned 5.4% and 22.7%, with inflows of $12.8 million and $58.6 million, respectively.
See More: The Mid-Year Renewable Energy Market Update: War, AI, and the Ongoing Energy Transition
Pure Play Exposure to Solar and Wind
For investors seeking pure-play exposure to specific renewable energy sources, the Invesco Solar ETF (TAN), offers concentrated exposure to a portfolio of companies involved in the global solar value chain by tracking the MAC Global Solar Energy Index.
For exposure to the wind power industry, the First Trust Global Wind Energy ETF (FAN) tracks the ISE Clean Edge Global Wind Energy Index, allocating 60% of investment toward pure-play wind energy companies that derive at least half of their revenues or energy capacity from wind-related activities, with the remaining 40% of portfolio allocations weighted toward broader companies engaged in wind energy alongside other operations.
TAN has returned 14.7% with inflows of $536.1 million in 2026, while FAN has risen 21.8% and recorded inflows of $62.8 million over the same period. These funds, along with many other ETFs involved in the clean energy transition, have yielded significantly higher returns than broad market benchmarks such as the VettaFi US Large-Cap 500 Index, which has returned just over 10% this year and fall roughly in line with broad energy funds such as the State Street Energy Select Sector SPDR ETF (XLE), climbing 20.5% over the same period.
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VettaFi LLC (“VettaFi”) is the index administrator and calculation agent for ELFY, for which it receives a fee. However, ELFY is not issued, sponsored, endorsed, or sold by VettaFi, and VettaFi has no obligation or liability in connection with the issuance, administration, marketing, or trading of ELFY.