As the world becomes more aware of the impact of climate change, clean energy has become a hot topic in the investment world. Clean energy ETFs (exchange-traded funds) have become a popular way for investors to gain exposure to the clean energy sector. But with so many options available, which clean energy ETF is the best?
First, it’s important to understand what a clean energy ETF is. An ETF is a type of investment fund that holds a basket of assets, such as stocks or bonds. A clean energy ETF specifically invests in companies that are involved in the production and distribution of clean energy, such as solar, wind, and hydro power.
One of the most popular clean energy ETFs is the iShares Global Clean Energy ETF (ICLN). This ETF invests in companies around the world that are involved in clean energy, including solar, wind, and hydro power. The fund has a diverse portfolio, with holdings in companies such as Tesla, Vestas Wind Systems, and First Solar. As of August 2021, the fund has a total net assets value of $6.5 billion.
Another popular clean energy ETF is the Invesco Solar ETF (TAN). As the name suggests, this ETF focuses specifically on companies involved in solar power. The fund has a concentrated portfolio, with holdings in companies such as Enphase Energy, SolarEdge Technologies, and Sunrun. As of August 2021, the fund has a total net assets value of $5.5 billion.
The SPDR S&P Kensho Clean Power ETF (CNRG) is another option for investors looking to gain exposure to the clean energy sector. This ETF invests in companies involved in the production and distribution of clean energy, as well as companies that provide technology and services to the clean energy sector. The fund has a diverse portfolio, with holdings in companies such as NextEra Energy, Tesla, and First Solar. As of August 2021, the fund has a total net assets value of $1.3 billion.
So, which clean energy ETF is the best? It ultimately depends on your investment goals and risk tolerance. If you’re looking for a diversified portfolio of clean energy companies from around the world, the iShares Global Clean Energy ETF (ICLN) may be a good option. If you’re specifically interested in companies involved in solar power, the Invesco Solar ETF (TAN) may be a better fit. And if you’re looking for a mix of clean energy companies and companies that provide technology and services to the clean energy sector, the SPDR S&P Kensho Clean Power ETF (CNRG) may be the way to go.
It’s important to note that investing in clean energy ETFs comes with risks, just like any other investment. The clean energy sector is still relatively new and can be volatile. It’s important to do your own research and consult with a financial advisor before making any investment decisions.
In conclusion, clean energy ETFs are a great way for investors to gain exposure to the clean energy sector. The iShares Global Clean Energy ETF (ICLN), Invesco Solar ETF (TAN), and SPDR S&P Kensho Clean Power ETF (CNRG) are all popular options, but the best ETF for you will depend on your investment goals and risk tolerance. As always, it’s important to do your own research and consult with a financial advisor before making any investment decisions.
