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Zacks Market Edge Highlights: CRBN, LOWC, SPYX, ICLN And PBW

Published 10/16/2019, 11:23 PM
Updated 07/09/2023, 06:31 AM

For Immediate Release

Chicago, IL – October 17, 2019 – Zacks Market Edge is a podcast hosted weekly by cks Stock Strategist Tracey Ryniec. Every week, Tracey will be joined by guests to discuss the hottest investing topics in stocks, bonds and ETFs and how it impacts your life. To listen to the podcast, click here:

5 ETFs to Invest in Clean Energy

Welcome to Episode #197 of the Zacks Market Edge Podcast.

Every week, host and Zacks stock strategist, Tracey Ryniec, will be joined by guests to discuss the hottest investing topics in stocks, bonds and ETFs and how it impacts your life.

This week, Tracey is joined by Zacks Director of ETF Research, Neena Mishra, to discuss the hottest area to invest in 2019. And no, it’s not the pot stocks, it’s clean energy.

With worries about climate change on the minds of many investors, many now want to invest in companies that are not contributing to the problem or that are finding solutions.

They want to own low carbon emitting companies, for instance. Or they want to own companies that are in solar, wind or other industries that are replacements for fossil fuels.

How can investors put their money behind their beliefs?

ETFs are Great for Investing in Niche Industries

Finding individual companies to invest in for clean energy is certainly possible, but who can really create a diverse portfolio that way?

The ETF industry is always adapting to trends so it’s not surprising that there are a handful of ETFs devoted to clean energy and low carbon investing. One has been around since 2008.

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But which one should you choose?

5 ETFs to Invest in Clean Energy

1. iShares MSCI ACWI Low Carbon Target (NYSE:TGT) ETF (CRBN) has 1264 holdings so it’s a broad-based ETF. You’re going to own the FAANG stocks plus the financials. It has a relatively low expense ratio of 0.2%.

2. State Street (NYSE:STT) Global Advisors SPDR Low Carbon Target ETF (LOWC) is similar to CRBN with the same expense ratio. It has 1,471 holdings, however but FAANG stocks also dominate its top ten holdings. It currently yields 2.5%.

3. SPDR S&P 500 (NYSE:SPY) Fossil Fuel Reserves Free ETF (SPYX) is for those who want to own the S&P 500 but don’t want to own the fossil fuel stocks like big oil companies. It has 485 holdings and a low expense ratio of 0.2%. Given that energy has been a poor performer in 2019, it has outperformed the S&P 500 index year-to-date with a return of 20.9%.

4. iShares Global Clean Energy ETF (NYSE:XLE) (ICLN) is for investors looking to invest in the clean energy concept, not to simply remove the fossil fuel investments. It only has 30 holdings so it’s a narrow niche ETF. 41% of the ETF is made up of US companies. The expense ratio is 0.46%.

5. Invesco Wilder Hill Clean Energy ETF (PBW) has just 40 holdings of which a majority are small cap companies. This focus on small cap names means this ETF will be more volatile. It has a forward P/E of 51.8. It has the highest expense ratio of these 5 ETFs at 0.77%.

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What else do you need to know about using ETFs to invest in the clean energy revolution?

Find out on this week’s podcast.

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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.

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iShares MSCI ACWI Low Carbon Target ETF (CRBN): ETF Research Reports

Invesco WilderHill Clean Energy ETF (PBW): ETF Research Reports

SPDR S&P 500 Fossil Fuel Reserves Free ETF (SPYX): ETF Research Reports

SPDR MSCI ACWI Low Carbon Target ETF (NYSE:LOWC

iShares Global Clean Energy ETF (ICLN): ETF Research Reports

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