ALPS Clean Energy (ACES)

Overview

The ALPS Clean Energy ETF (ICLN) seeks to track the performance of the CIBC Atlas Clean Energy Index, providing exposure to companies involved in clean energy-related businesses. It focuses on developed markets and aims for long-term capital appreciation through investments in renewable energy sources and technologies.

Reputation and Reliability

ALPS is a well-established ETF issuer known for its thematic and sector-specific ETFs. They have a solid track record in providing innovative investment solutions.

Management Expertise

ALPS Advisors brings significant experience in managing thematic ETFs, with a team dedicated to researching and implementing investment strategies in evolving sectors like clean energy.

Goal

The primary investment goal is to track the performance of the CIBC Atlas Clean Energy Index, reflecting the global clean energy sector and providing long-term capital appreciation.

Investment Approach and Strategy

Strategy: ICLN aims to replicate the performance of the CIBC Atlas Clean Energy Index, which uses a rules-based methodology to select and weight clean energy companies.

Composition The ETF holds a diversified portfolio of stocks from companies primarily engaged in clean energy businesses, including solar, wind, hydro, and other renewable energy technologies. The companies are predominantly equities.

Market Share: ICLN holds a prominent market share within the clean energy ETF segment.

Total Net Assets (AUM): 2260000000

Key Competitors

• TAN
• QCLN
• FAN
• ACES

Competitive Landscape

The clean energy ETF industry is competitive with several key players. ICLN has a diversified international scope, which gives it an edge over some competitors, while TAN focuses specifically on solar. ACES focuses on American clean energy businesses. Competitive disadvantages include being sensitive to international market volatility.

Historical Performance: Historical performance data is available through various financial data providers. Returns are greatly impacted by technology and political trends.

Benchmark Comparison: Performance can be compared to the CIBC Atlas Clean Energy Index to assess tracking effectiveness.

Expense Ratio: 0.42

Average Trading Volume

The average trading volume is generally high, reflecting strong investor interest in clean energy, thus offering sufficient liquidity.

Bid-Ask Spread

The bid-ask spread is usually tight, indicating relatively low trading costs for the ETF.

Market Environment Factors

Government policies, technological advancements, and environmental regulations significantly impact ICLN's performance. Investor sentiment towards ESG investment strategies also plays a role.

Growth Trajectory

ICLN's growth trajectory is closely linked to the expansion of the clean energy sector and global efforts to transition to renewable energy sources. Changes in holdings reflect new clean technology innovations.

Competitive Edge

ICLN's competitive edge lies in its broad, diversified exposure to the global clean energy sector, encompassing various renewable energy technologies. The CIBC Atlas Clean Energy Index tracks the global clean energy market, providing coverage to a wide array of opportunities, with a low cost of entry. This strategy reduces concentration risk compared to ETFs focused on a single technology like solar. However, broad scope is also a disadvantage, as it dilutes exposure to any particular technology.

Volatility

ICLN can exhibit higher volatility due to the dynamic nature of the clean energy sector and its sensitivity to policy changes.

Market Risk

Market risks include regulatory changes, technological disruptions, and fluctuations in commodity prices affecting the profitability of clean energy companies. Additionally, global economic conditions and investor sentiment towards green investments impact the fund's value.

Ideal Investor Profile

The ideal investor is seeking long-term capital appreciation and wants exposure to the clean energy sector as part of a broader investment strategy. This is suitable for investors interested in ESG-aligned investments.

Market Risk

ICLN is best suited for long-term investors who are comfortable with the potential volatility of the clean energy sector. Active traders may also use it for short-term gains, but it is primarily designed for passive index followers.

ICLN provides diversified exposure to the global clean energy sector through a rules-based index methodology. The ETF's performance is closely tied to government policies, technological advancements, and environmental regulations. While it offers growth potential, investors should be aware of the potential volatility and market risks associated with clean energy companies. It is most suitable for long-term investors seeking exposure to renewable energy and aligned with ESG investment strategies. The ETF's broad mandate dilutes the high-growth opportunities found in other, more focused funds.

Data Sources:

• ALPS Advisors Website
• ETF.com
• Morningstar
• Yahoo Finance

Disclaimers:

The information provided is for informational purposes only and should not be considered investment advice. Investors should conduct their own research and consult with a financial advisor before making any investment decisions. Past performance is not indicative of future results.