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bassemauthorWhat are the Best Clean Energy ETFs?
As the world grapples with the effects of climate change and the need for cleaner energy sources, investment in clean energy companies and technologies has become increasingly important. Exchange traded funds (ETFs) provide a convenient and diversified way to invest in the clean energy sector, offering potential growth and income returns. In this article, we will explore the best clean energy ETFs available and their performance in recent years.
1. Clean Energy Innovations (CEI)
The Clean Energy Innovations ETF (CEI) is one of the earliest and largest clean energy ETFs, launched in 2008. CEI tracks the Performance Renewable Energy Stocks (PRS) Index, which is composed of stocks from companies involved in the development, production, and distribution of renewable energy technologies. The fund's top holdings include First Solar, Vestas Wind Systems, and Sunrun. CEI has a total annual expense ratio of 0.65% and a three-year annualized return of 10.42% as of September 2021.
2. XLE Renewable Energy
The SPDR S&P Renewable Energy ETF (XLE) is another popular clean energy ETF, launched in 2014. XLE tracks the S&P Renewable Energy Index, which includes companies involved in the production, distribution, and development of renewable energy technologies. The fund's top holdings include NextEra Energy, Vestas Wind Systems, and First Solar. XLE has a total annual expense ratio of 0.35% and a three-year annualized return of 12.27% as of September 2021.
3. KOD Investment Trust Renewable Energy
Launched in 2015, the KOD Investment Trust Renewable Energy ETF (KOD) tracks the KOD Investment Trust Renewable Energy Index, which includes companies involved in the production, distribution, and development of renewable energy technologies. The fund's top holdings include Vestas Wind Systems, First Solar, and NextEra Energy. KOD has a total annual expense ratio of 0.60% and a three-year annualized return of 11.02% as of September 2021.
4. Global X Renewable Energy Investment (GRN)
Launched in 2014, the Global X Renewable Energy Investment ETF (GRN) tracks the Global X Renewable Energy ETF Trust, which includes companies involved in the production, distribution, and development of renewable energy technologies. The fund's top holdings include Vestas Wind Systems, First Solar, and NextEra Energy. GRN has a total annual expense ratio of 0.65% and a three-year annualized return of 11.23% as of September 2021.
Investing in clean energy ETFs can be a efficient and diversified way to gain exposure to the renewable energy sector. While the performance of these funds has been positive in recent years, investors should also consider the risks associated with these investments, such as market volatility and the potential for performance fluctuations. Prior to investing, it is essential to conduct thorough research and consider the appropriate investment strategy for your risk tolerance and investment goals.