Senate remains Republican-controlled following the Georgia run-off elections, which would dampen the likelihood of the Biden administration’s ambitious climate change plans involving a big push towards renewables. One risk for investors is that these high-flying ETFs could drop if the U.S. Crigger says.Īdding to its performance is the ETF holds many large semiconductor makers, “which have had a pretty good run.” The ETF is also the second-largest ETF by AUM at US$2.7-billion and has an MER of 0.71 per cent. “A lot of that (performance) is based on the Biden win,” Ms. Both are among the largest in the sector, with between US$1-billion and US$2-billion in AUM, and around the industry average for MERs at 0.6 and 0.7 per cent, respectively.īut the best-performing clean energy ETF so far this year is focused solely on solar the Invesco Solar ETF (TAN-A). Both are up about 150 per cent year-to-date, Ms. Wind and solar-powered returnsĪlthough ICLN and SMOG have done well, others have done better, including the Invesco WilderHill Clean Energy ETF (PBW-A) and First Trust NASDAQ Clean Edge Green Energy ETF (QCLN-Q). “Clean energy ETFs by and large have not experienced the same cost pressures that we have seen in broader ESG (environmental, social and governance) ETFs.”īy comparison, ESG ETFs’ MERs are often about 20 basis points, whereas “thematic renewable energy ETFs often cost three to four times that.” However, the added cost hasn’t dampened investor demand, particularly for more specialized clean energy ETFs. CTEC’s management expense is 0.5 per cent while SMOG’s MER is around the industry average at 0.62 per cent, says Lara Crigger, editor-in-chief at ETF Action. It also has among the lowest MERs in the sector at 0.46. ICLN, meantime, is up about 98 per cent year-to-date. SMOG’s price has increased by about 95 per cent so far this year “and onereason is Tesla is its largest holding,” Mr. CTEC, up by about 20 per cent since it launched in October, invests only in clean energy technology companies.Īnother is the VanEck Vectors Low Carbon Energy ETF (SMOG-A) that “sits in the middle” with about 20 per cent of AUM involved in energy production, he says. Straus of National Bank says, with ICLN on one end and Global X CleanTech ETF (CTEC-Q) on the other. “When it comes to renewable energy ETFs, there’s a spectrum of investment,” Mr. With about US$3-billion in assets under management (AUM), it offers a blend of clean energy producers – about 55 per cent of holdings – and companies involved in technologies and equipment for clean energy production. That’s certainly the case for the sector’s largest, iShares Global Clean Energy ETF (ICLN-Q). “It’s been a hell of a year for green energy ETFs,” says Tim Nash, founder of Good Investing, a Toronto-based financial planning firm specializing in sustainable investment. Many have posted much higher returns year-to-date than the Canadian options. market has about a dozen renewable energy ETFs from broad-based global funds to those narrowly focused on solar and wind. Green options aplenty south of the border 7 compared with about 13 per cent for XUT. ZUT has outperformed XUT so far this year, returning about 23 per cent as of Dec. Their portfolios also include Canadian renewable companies among top holdings, including Brookfield Renewable Partners LP and Northland Power Inc. Both have management expense ratios (MERs) of about 60 basis points – similar to most clean-energy themed U. Another is the iShares S&P/TSX Capped Utilities Index ETF (XUT-T), with about 55 per cent exposure. ![]() The Canadian market currently includes traditional utilities ETFs with significant holdings in renewables.īMO’s Equal Weight Utilities ETF (ZUT-T) offers the highest exposure with about 66 per cent of its holdings involved in clean energy, Mr. In the meantime, investors seeking to go green still have plenty of choice: Homegrown ETF choices Harvest ETFs filed a prospectus in early December for its Clean Energy ETF (HCLN), which should list in Canada soon. Straus notes the Canadian market has no ETFs entirely focused on renewables, for the time being. Still, investors seeking Canadian-listed renewable energy ETFs have few options. Prices of some pure-play clean energy ETFs have posted triple-digit returns so far this year, with Canadian companies among their top holdings.
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