ALPS Clean Energy (ACES)

Overview

The ALPS Clean Energy ETF (ACES) is an exchange-traded fund that seeks to track the performance of companies actively involved in the clean energy sector. Its focus is on companies that produce energy from renewable sources such as solar, wind, hydro, geothermal, and biomass, as well as those involved in the development and manufacturing of clean energy technologies and infrastructure.

Reputation and Reliability

ALPS Investments is a well-established investment management firm known for its suite of specialized ETFs. They have a solid reputation for providing diversified investment solutions and maintaining operational integrity.

Management Expertise

While ACES is an index-tracking ETF, ALPS Investments employs a dedicated team of investment professionals with expertise in various asset classes and sectors, ensuring the fund is managed according to its stated objectives.

Goal

To provide investors with exposure to the growth potential of the clean energy industry.

Investment Approach and Strategy

Strategy: ACES aims to track the CIBC Clean Energy Index, which is designed to represent the performance of publicly traded companies that are significantly involved in the clean energy sector.

Composition The ETF primarily holds a diversified portfolio of global equities of companies engaged in clean energy production, technology, and infrastructure. This includes renewable energy generation, energy efficiency, and advanced battery technologies.

Market Share: Specific market share data for ACES within the broader clean energy ETF landscape can fluctuate. It holds a notable position as one of the prominent ETFs focused on this niche sector.

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Key Competitors

• iShares Global Clean Energy ETF (ICLN)
• Invesco Solar ETF (TAN)
• First Trust NASDAQ Clean Edge Green Energy Index Fund (QCLN)

Competitive Landscape

The clean energy ETF market is competitive, with several established players offering similar exposure. ACES competes on its specific index methodology and the breadth of its clean energy definition. Key advantages include its focus on a diversified clean energy universe, while potential disadvantages might include a smaller AUM compared to larger competitors, which can sometimes impact liquidity and bid-ask spreads.

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Benchmark Comparison: Historically, ACES has shown performance that generally tracks its benchmark index, the CIBC Clean Energy Index. Deviations can occur due to tracking error, expense ratios, and the specific portfolio construction of the ETF. A recent 1-year performance shows underperformance relative to a broader market index.

Expense Ratio: 0.6

Average Trading Volume

The average daily trading volume for ACES is typically sufficient for most retail investors to enter and exit positions without significant difficulty.

Bid-Ask Spread

The bid-ask spread for ACES can vary, but it generally remains within reasonable levels for an ETF of its size and sector focus, indicating moderate trading costs.

Market Environment Factors

The clean energy sector is influenced by government policies, technological advancements, fluctuating commodity prices (e.g., oil and gas), global economic growth, and increasing investor demand for sustainable investments. Regulatory support for renewable energy and decarbonization efforts are significant drivers.

Growth Trajectory

The clean energy sector has experienced significant growth driven by global decarbonization initiatives and declining costs of renewable technologies. ACES's holdings reflect this trend, with a consistent focus on companies poised to benefit from the transition to a low-carbon economy. There's a sustained trend towards increasing investment in renewables.

Competitive Edge

ACES's competitive edge lies in its specialized focus on a broad definition of clean energy, encompassing not just renewable generation but also enabling technologies and infrastructure. It offers a diversified approach to investing in this high-growth sector. The ETF's adherence to the CIBC Clean Energy Index ensures a systematic and transparent approach to selecting companies aligned with the clean energy transition.

Volatility

The ALPS Clean Energy ETF has historically exhibited higher volatility compared to broader market indices due to the concentrated nature of the clean energy sector and its sensitivity to regulatory changes and technological disruptions.

Market Risk

Key market risks include regulatory risk (changes in government policies supporting or hindering clean energy), technology risk (rapid obsolescence of existing technologies or the emergence of superior new ones), commodity price risk (impact on the cost of energy and raw materials for clean energy production), and general equity market risk.

Ideal Investor Profile

The ideal investor for ACES is one who believes in the long-term growth potential of the clean energy sector and is comfortable with the associated volatility. This investor typically has a moderate to high risk tolerance and a long-term investment horizon.

Market Risk

ACES is best suited for long-term investors seeking to diversify their portfolio with exposure to a rapidly evolving and globally significant sector. It is less suitable for short-term traders due to its sector-specific volatility.

The ALPS Clean Energy ETF (ACES) offers targeted exposure to the growing clean energy sector by tracking the CIBC Clean Energy Index. While facing competition, its specialized focus provides a distinct investment avenue. The ETF is subject to sector-specific risks and volatility but is well-positioned to benefit from global decarbonization trends. It's an appropriate choice for long-term investors with a higher risk tolerance.

Data Sources:

• ALPS Funds Website
• Financial Data Aggregators (e.g., Morningstar, ETFdb)
• Index Provider Websites (e.g., CIBC)

Disclaimers:

This information is for educational purposes only and does not constitute investment advice. Past performance is not indicative of future results. Investors should conduct their own research and consult with a financial advisor before making any investment decisions.