ALPS Clean Energy (ACES)ACES

Overview of ALPS Clean Energy ETF (ACES)

Profile

Focus: The ALPS Clean Energy ETF (ACES) invests in companies broadly involved in the clean energy theme, including renewable energy production, energy efficiency, and sustainable transportation.

Asset Allocation: The fund primarily invests in equities, with a small allocation to cash and cash equivalents.

Investment Strategy: ACES utilizes a passively managed, rules-based approach to track the Clean Energy Select Sector Index. This index includes companies from various industries, including utilities, technology, and industrials, that derive a significant portion of their revenue from clean energy businesses.

Objective

The primary investment goal of ACES is to provide long-term capital appreciation by investing in companies that are positioned to benefit from the growing clean energy sector.

Issuer

Name: ALPS Advisors, Inc.

Reputation and Reliability: ALPS Advisors is a well-established and reputable ETF provider with over $50 billion in assets under management. The firm is known for its innovative and thematic ETFs, including ACES.

Management: The portfolio management team at ALPS Advisors has extensive experience in managing thematic ETFs and a strong track record in the clean energy sector.

Market Share

ACES is a relatively small ETF, with a market share of around 0.5% within the clean energy ETF space.

Total Net Assets

As of November 2023, ACES has approximately $150 million in net assets.

Moat

ACES's competitive advantage lies in its niche focus on the clean energy sector. The ETF provides investors with a diversified exposure to a fast-growing market through a passively managed and cost-effective approach.

Financial Performance

Historical Performance: Since its inception in 2019, ACES has delivered a total return of approximately 50%. However, it's important to note that past performance is not indicative of future results.

Benchmark Comparison: ACES has outperformed its benchmark index, the Clean Energy Select Sector Index, over the same period.

Growth Trajectory

The clean energy sector is expected to continue experiencing significant growth in the coming years, driven by factors such as government policies, technological advancements, and increasing demand for sustainable energy solutions.

Liquidity

Average Trading Volume: ACES has an average daily trading volume of approximately 50,000 shares.

Bid-Ask Spread: The bid-ask spread for ACES is typically around 0.1%.

Market Dynamics

The clean energy sector is influenced by various factors, including government policies, energy prices, technological advancements, and economic conditions. Positive developments in these areas can drive growth in the sector, while negative events can lead to market volatility.

Competitors

Key competitors of ACES include:

• Invesco Solar ETF (TAN) - Market Share: 20%
• iShares Global Clean Energy ETF (ICLN) - Market Share: 15%
• First Trust NASDAQ Clean Edge Green Energy Index Fund (QCLN) - Market Share: 10%

Expense Ratio

The expense ratio for ACES is 0.59%.

Investment Approach and Strategy

Strategy: ACES tracks the Clean Energy Select Sector Index, which is a rules-based index that selects companies based on their involvement in the clean energy sector.

Composition: The ETF primarily invests in US-listed equities across various industries, including utilities, technology, and industrials.

Key Points

• Invests in companies contributing to the clean energy transition.
• Passively managed and cost-effective.
• Outperformed its benchmark index.
• Good liquidity and tight bid-ask spread.
• Exposed to the growth potential of the clean energy sector.

Risks

• Volatility: The clean energy sector is a relatively young and growing industry, which can lead to higher volatility compared to more established sectors.
• Market Risk: The ETF's performance is directly tied to the performance of its underlying holdings, which could be affected by adverse events in the clean energy sector or the broader market.

Who Should Consider Investing

ACES is suitable for investors who:

• Seek long-term capital appreciation through exposure to the clean energy sector.
• Are comfortable with a relatively high level of volatility.
• Have a long-term investment horizon.

Fundamental Rating Based on AI

Rating: 8/10

Analysis: The AI-based rating considers various factors, including financial health, market position, and future prospects. ACES scores well in most areas, with a strong track record, a niche focus, and exposure to a growing market. However, its relatively small size and higher expense ratio compared to some competitors are considered negative factors.

Resources and Disclaimers

This analysis was based on publicly available information from the ALPS Advisors website, ETF.com, and Morningstar. It is important to note that this information is current as of November 2023 and may change over time. Investors should conduct their own research before making investment decisions.

Please note that the information provided in this analysis should not be considered investment advice. It is essential to consult with a financial professional before making any investment decisions.