5 Biggest Clean Energy ETFs in 2023

Cleantech Investing

globe with clean energy sources around it

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With interest in ETFs on the rise, now may be the time for environmentally minded investors to think about clean energy ETFs.

Exchange-traded funds (ETFs) have been gaining popularity in North America in a wide range of industries, including the clean energy sector, whose appeal is rapidly increasing.

ETF inflows have hit record levels in recent years. In 2021, investment surpassed US$1 trillion for the first time to land at US$1.29 trillion for that year; that's compared to US$735.7 billion for 2020. The rising demand for these investment products spurred fund houses to launch more ETFs in 2021, and even to convert their existing mutual funds into ETFs.

While the global economic uncertainty brought on by catalysts such as inflation and Russia's war in Ukraine led to a 33 percent decline in ETF inflows for a total of US$856.16 billion in 2022, analysts are optimistic that 2023 will bring strong demand, with an estimated range of US$750 billion to US$1 trillion in ETF inflows.

ETFs have become so popular partially because they provide a safer way for investors to gain exposure to various industries while avoiding the volatility that comes with investing in individual stocks.

Below is a look at the five top clean energy ETFs to consider, ranked by total assets. All numbers and figures were gathered using ETFdb.com and were current as of March 8, 2023. Read on to learn more.

1. iShares Global Clean Energy ETF (NASDAQ:ICLN)

Company Profile

Total assets: US$4.94 billion

The iShares Global Clean Energy ETF was created on June 24, 2008, and has a large portfolio of domestic and international stocks.

An analyst report on the ETF states that it "likely doesn't deserve" a large weighting in an investor's long-term portfolio. It suggests that the fund could be useful as a "satellite holding" that looks at a fraction of the market that is often overlooked by less focused ETFs.

Three of the iShares Global Clean Energy ETF's top-weighted holdings include: First Solar (NASDAQ:FSLR) with a 8.23 percent weighting, Enphase Energy (NASDAQ:ENPH) at 7.94 percent and SolarEdge Technologies (NASDAQ:SEDG) at 7.27 percent.

2. First Trust NASDAQ Clean Edge Green Energy Index Fund (NASDAQ:QCLN)

Company Profile

Total assets: US$1.76 billion

The First Trust NASDAQ Clean Edge Green Energy Index Fund, which officially came into existence on February 14, 2007, is a "unique member" of the alternative energy category, according to ETFdb.com. Why? Because it invests in companies that have interests in different green energy subsectors, such as biofuels, solar energy and advanced batteries.

ETFdb.com also states that because of this ETF's focus, it may be appealing to investors looking for broader exposure in the alternative energy sector. Three of its highest-weighted holdings are ON Semiconductor (NASDAQ:ON) at 9.34 percent, Tesla (NASDAQ:TSLA) at 8.6 percent and Enphase Energy at 6.24 percent.

3. Invesco WilderHill Clean Energy ETF (ARCA:PBW)

Company Profile

Total assets: US$811.62 million

Begun on March 3, 2005, the Invesco WilderHill Clean Energy ETF focuses on clean energy companies using green and renewable energy and technologies that help with cleaner energy.

Currently this ETF's top-weighted holdings include Navitas Semiconductor (NASDAQ:NVTS) at 2.27 percent, Wallbox (NYSE:WBX) at 2.18 percent and QuantumScape (NYSE:QS) at 1.9 percent.

4. ALPS Clean Energy ETF (ARCA:ACES)

Company Profile

Total assets: US$547.35 million

The ALPS Clean Energy ETF was formed fairly recently, on June 29, 2018. The majority of the companies in this ETF are based in North America. The top three holdings of the ETF are First Solar, Tesla and Brookfield Renewable Partners (TSX:BEP.UN,NYSE:BEP), with weightings of 7.57 percent, 5.73 percent and 5.5 percent, respectively.

5. SPDR S&P Kensho Clean Power ETF (ARCA:CNRG)

Company Profile

Total assets: US$363.96 million

The SPDR S&P Kensho Clean Power ETF was launched in October 2018 and tracks companies whose products and services are driving innovation in the clean energy sector, including the areas of solar, wind, geothermal and hydroelectric power.

The fund currently has 44 holdings. The top three by weight are Generac (NYSE:GNRC) at 3.44 percent, First Solar at 3.4 percent and Canadian Solar (NASDAQ:CSIQ) at 3.16 percent.

This is an updated version of an article originally published by the Investing News Network in 2018.

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Securities Disclosure: I, Melissa Pistilli, hold no direct investment interest in any company mentioned in this article.

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Cleantech Investing News

5 Biggest Clean Energy ETFs in 2023

1. iShares Global Clean Energy ETF (NASDAQ:ICLN)

2. First Trust NASDAQ Clean Edge Green Energy Index Fund (NASDAQ:QCLN)

3. Invesco WilderHill Clean Energy ETF (ARCA:PBW)

4. ALPS Clean Energy ETF (ARCA:ACES)

5. SPDR S&P Kensho Clean Power ETF (ARCA:CNRG)

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