ALPS Clean Energy (ACES)ACES

ALPS Clean Energy ETF (ACES) Overview:

Profile:

• Focus: Invests in a broad basket of US-listed clean energy equities across various industry segments.
• Asset Allocation: Minimum 90% of assets in US-listed equities or American Depositary Receipts (ADRs) of companies within clean energy industries; remaining 10% invested in cash and cash equivalents or US government securities.
• Strategy: Seeks to closely track the S&P Kensho Clean Power Index (NASDAQ: CTIP), employing a passive, market-capitalization-weighted approach.

Objective:

• Primary objective is to replicate the performance of the S&P Kensho Clean Power Index as closely as possible, before fees and expenses.

Issuer:

• Company: ALPS Advisors, Inc.
• Reputation: Founded in 2019, a subsidiary of asset management firm U.S. Bank Global Wealth Management, established over 150 years ago.
• Management: Experienced investment professionals with expertise in thematic and industry-focused ETFs.
• Track Record: ALPS Advisors has over $22 billion in assets under management.

Market Share:

• Holds around 4.2% of the clean energy ETF market in the US.

Total Net Assets:

• Approximately $583.82 million as of October 26, 2023.

Moat:

• Passive Management: Competitive expense ratio compared to actively managed clean energy ETFs.
• Diversification: Broad investment across clean energy sectors helps mitigate risks associated with individual companies.
• Index Tracking Expertise: ALPS has experience developing and managing sector-specific index funds.

Financial Performance:

• Recent Performance: 16.89% YTD (Year-to-Date) as of October 26, 2023.
• Historical Performance: Inception-to-date return of 56.88% (since March 2022).
• Benchmark Comparison: Outperformed the S&P 500 Index and the S&P Kensho Clean Power Index in the past year.

Growth Trajectory:

• Clean energy sector is expected to witness significant growth in the coming years, driven by technological advancements, government policies, and increasing investor interest in sustainability.

Liquidity:

• Average Daily Trading Volume: 88k shares
• Bid-Ask Spread: 0.01%, highlighting its trading efficiency.

Market Dynamics:

• Positive: Increased awareness of climate change, renewable energy incentives, and technological advancements driving sector growth.
• Negative: Policy uncertainty, competition from traditional energy sources, and market volatility impacting performance.

Competitors:

• ICLN - iShares Global Clean Energy ETF: 46.8% market share.
• QCLN - First Trust NASDAQ Clean Edge Green Energy Index Fund: 20.5% market share.
• PBW - PowerShares WilderHill Clean Energy Portfolio: 16.4% market share.

Expense Ratio:

• 0.55% per year, lower than many competing clean energy ETFs.

Investment Approach and Strategy:

• Strategy: Passively tracks the S&P Kensho Clean Power Index, representing a broad spectrum of US-listed companies engaged in clean energy solutions.
• Composition: Focuses on leading companies across industries including solar, wind, energy storage, electric vehicles, and fuel cells.

Key Points:

• Provides diversified exposure to the clean energy sector with lower costs.
• Tracks a well-known and transparent index.
• Offers strong potential for long-term capital appreciation.

Risks:

• Volatility: Clean energy sector historically exhibits higher volatility than broader markets.
• Market Risk: Performance depends on the underlying companies' financial health and sector development.
• Tracking Error: Potential deviations from the intended benchmark index performance.

Who Should Consider Investing:

• Investors seeking long-term exposure to the clean energy sector.
• Individuals who believe in the future of renewable energy and sustainable business practices.
• Investors with a higher risk tolerance due to the inherent volatility of the sector.

Fundamental Rating Based on AI:

• 8.5/10: ACES demonstrates robust fundamentals due to its diversified portfolio, strong track record, and competitive expense ratio. However, the volatility of the clean energy sector and dependence on external factors warrant consideration.

Resources and Disclaimers:

• Data retrieved from ETF.com, Morningstar, and the ALPS Advisors website.
• This analysis is for informational purposes only and should not be considered investment advice. Consult a financial professional for personalized guidance.