10 Best Clean Energy ETFs for October 2024

serts / iStock.com

Commitment to Our Readers

GOBankingRates' editorial team is committed to bringing you unbiased reviews and information. We use data-driven methodologies to evaluate financial products and services - our reviews and ratings are not influenced by advertisers. You can read more about our editorial guidelines and our products and services review methodology.

20 Years
Helping You Live Richer

Reviewed
by Experts

Trusted by
Millions of Readers

With the Biden Administration’s emphasis on clean energy initiatives to potentially reduce greenhouse gas emissions by 40% by 2030 and achieve net-zero — carbon neutrality — by 2050, clean energy stocks may seem to be a smart investment.

Clean energy exchange-traded funds (ETFs) offer exposure to a wide range of clean energy stocks without betting it all on one company. ETFs invest in multiple stocks within a single industry, or several related industries, to help you create a diversified portfolio without having to manage a lot of individual investments.

10 Top Clean Energy ETFs

High global interest rates and a slow rollout of Inflation Reduction Act-financed projects have hit clean energy stocks hard over the last year, and clean energy ETFs have felt the effects. However, experts think things could turn around this year. That makes clean energy ETFs a potentially lucrative buy-and-hold investment.

These 10 clean energy ETFs are worth a look for your portfolio:

• iShares Global Clean Energy (ICLN)
• Invesco WilderHill Clean Energy ETF (PBW)
• Invesco Global Clean Energy Holdings (PBD)
• Invesco Solar ETF (TAN)
• ALPS Clean Energy ETF (ACES)
• First Trust Global Wind Energy ETF (FAN)
• First Trust Nasdaq Clean Edge Green Energy Index Fund (QCLN)
• ProShares S&P Kensho Cleantech ETF (CTEX)
• Harbor Energy Transition Strategy ETF (RENW)
• Global X Lithium & Battery Tech ETF (LIT)

iShares Global Clean Energy (ICLN)

• Price: $14.63
• Assets under management: $2.16 billion
• Expense ratio: 0.41%
• Top five holdings: First Solar, Enphase Energy, Iberdrola, Consolidated Edison, Vestas Wind Systems

The iShares Global Clean Energy ETF, like most ETFs in this roundup, is trading about midway between its 52-week high and low. The fund invests in companies that produce renewable energy from solar, wind and other sources. Some of its holdings include Enphase Energy, Consolidated Edison and First Solar, all clean energy companies on the S&P 500 index.

A low expense ratio of 0.41% and a 30-day SEC yield of 1.52% make this ETF a standout for 2024.

Invesco WilderHill Clean Energy ETF (PBW)

• Price: $19.29
• Assets under management: $287.4 million
• Expense ratio: 0.65%
• Top five holdings: EVgo Inc., Sunnova Energy International, Sunrun Inc., Tesla, Standard Lithium Ltd. 

The Invesco WilderHill Clean Energy ETF tracks the WilderHill New Energy Global Innovation Index, with at least 90% of its assets in securities on that index. The fund is weighted toward small-cap stocks, which make up about 37% of the portfolio.

Invesco Global Clean Energy Holdings (PBD)

• Price: $13.44
• Assets under management: $106.2 million
• Expense ratio: 0.75%
• Top five holdings: Tianneng Power International Limited, XPeng, Inc., NIO Inc., Ameresco Inc., Eos Energy Enterprises, Inc.

It’s important not to confuse Invesco Global Clean Energy Holdings (PBD) with its counterpart, PBW. Both track the WilderHill Clean Energy Index, but PBD includes global companies, with U.S.-based companies making up just under 27% of its holdings and the rest diversified across China, Taiwan, South Korea, Japan, Europe and Canada.

Make your money work for you

Get the latest news on investing, money, and more with our free newsletter.

Submit

By subscribing, you agree to our Terms of Use and Privacy Policy. Unsubscribe at any time.

Thanks!

You're now subscribed to our newsletter. Check your inbox for more details.

Invesco Solar ETF (TAN)

• Price: $41.60
• Assets under management: $1.07 billion
• Expense ratio: 0.67%
• Top five holdings: First Solar, Enphase Energy, Nextracker, Sunrun Inc., GCL Technology Holdings Limited

The Invesco’s Solar ETF, unlike its clean energy holdings, is a highly focused fund that tracks the performance of stocks on the MAC Global Solar Energy Index. The fund includes top solar companies like Enphase Energy and First Solar, making it a good choice if you want to support the growing future of solar power across the continent.

ALPS Clean Energy ETF (ACES)

• Price: $28.49
• Assets under management: $189.7 million
• Expense ratio: 0.55%
• Top five holdings: First Solar Inc., Tesla Inc., Albemarle Corp., Itron Inc., Brookfield Renewable Partners LP

The ALPS Clean Energy ETF tracks the CIBC Atlas Clean Energy Index, focused on U.S. and Canadian companies involved in renewable energy and clean technology. With modest fees of 0.55%, this passively managed fund emphasizes thematic growth in the industry, bolstered by a belief in a sustainable future.

First Trust Global Wind Energy ETF (FAN)

• Price: $17.22
• Assets under management: $195.8 million
• Expense ratio: 0.60%
• Top five holdings: Orsted, EDP Renovaveis, Vestas Wind Systems, Northland Power, Boralex Inc.

The fund includes companies identified as “pure play” — directly related to producing wind power — and “diversified” companies, which are in some way related to the sustainable energy market. That makes this ETF a solid choice, especially if you are interested in supporting the growth of wind power.

First Trust Nasdaq Clean Edge Green Energy Index Fund (QCLN)

• Price: $34.93
• Assets under management: $670.6 million
• Expense ratio: 0.59%
• Top five holdings: Tesla, First Solar, Enphase Energy, ON Semiconductor Corp., Rivian Automotive

The First Trust Nasdaq Clean Edge Green Energy Index Fund tracks companies on the Nasdaq index that are “engaged in manufacturing, development, distribution and installation of clean energy technologies including, but not limited to, solar photovoltaics, wind power, advanced batteries, fuel cells and electric vehicles.” This makes it one of the more diversified funds on this list, covering virtually every green energy technology.

If you want to support sustainability with a largely U.S.-based fund, this ETF is one way to do so.

ProShares S&P Kensho Cleantech ETF (CTEX)

• Price: $22.19
• Assets under management: $3.4 million
• Expense ratio: 0.58%
• Top five holdings: Sunnova Energy International, Sunrun Inc., GE Vernova Inc., First Solar Inc., American Superconductor Corp.

The ProShares S&P Kensho Cleantech ETF tracks the performance of stocks in the S&P Kensho Cleantech Index. U.S. companies make up 87.51% of holdings; the remainder are located in China, Canada and Israel. The fund is heavily weighted toward manufacturing (40.85%) and electronic technology (32.17%).

Introduced in September 2021, this ETF soared after its IPO and holds net assets of over $3 million currently, which leaves plenty of room for rebound.

Harbor Energy Transition Strategy ETF (RENW)

• Price: $13.03
• Assets under management: $11.6 million
• Expense ratio: 0.80%
• Top five holdings: Treasury securities, U.S. dollar

One of the newer ETFs on this list, the Harbor Energy Transition Strategy ETF, which supports companies devoted to leading the transition to renewable energy, was created in July 2022. It tracks the Quantix Energy Transition Index, which is comprised of futures contracts on commodities that support the transition to clean energy. Be aware of its relatively high expense ratio of 0.80%.

However, the ETF yields 3.44%, and with a price per share under $15, it’s one of the most affordable funds.

Global X Lithium & Battery Tech ETF (LIT)

• Price: $40.10
• Assets under management: $1.13 billion
• Expense ratio: 0.75%
• Top five holdings: Albemarle Corp.,Tesla, Inc., TDK Corp., BYD Co. Ltd., LG Energy Solution Ltd.

If you are putting your money on electric vehicles as the future of transportation, you may want to invest in the companies that provide the components that make EVs possible. The Global X Lithium & Battery Tech ETF could grow in value as demand for lithium-ion batteries for electronics and EVs grows. It gives investors broad exposure to lithium, with holdings representing every stage in the cycle, from mining to battery production.

What Is the Largest Clean Energy Fund?

The iShares Global Clean Energy ETF is the largest clean energy fund by total assets, according to VettaFi’s ETF database. The fund manages $2.16 billion in assets as of Sept. 26.

Is a Clean Energy ETF a Good Investment?

With the growth of renewable energy and clean energy initiatives, clean energy ETFs would seem to be a solid investment choice now and in the future. McKinsey and Company predicted that by 2026, global renewable-electricity capacity could grow more than 80% from 2020 levels, with roughly two-thirds of that growth coming from wind and solar.

ETFs make it possible to invest in the whole industry without choosing individual stocks. Keep in mind, near-term performance may not represent the value you can ultimately derive from these investments.

In the case of clean energy stocks, it might be wise to embrace Warren Buffett’s philosophy of not buying a stock for 10 minutes if you aren’t willing to hold it for 10 years.

How To Invest in Clean Energy ETFs

You purchase ETFs through an investment brokerage, so the first step is to open an account. Once your account is open and funded, you can invest in individual ETFs or, if your broker offers it, a robo portfolio of climate-themed ETFs selected by experts.

Final Note

ETFs give investors an easy and relatively inexpensive way to support companies that promote clean energy. Speak to an investment advisor about whether clean energy ETFs are a good match for your investment goals and risk tolerance. If so, download a popular investment app, such as Fidelity or Acorns, to begin diversifying your portfolio with clean energy ETFs.

Information is accurate as of Sept. 26, 2024.

Cynthia Measom and Daria Uhlig contributed to the reporting for this article.

Share This Article: