ALPS Clean Energy (ACES)

ETF ALPS Clean Energy: A Comprehensive Overview

Profile

Focus: This ETF primarily invests in clean energy companies worldwide, including those involved in renewable energy generation, energy efficiency, and sustainable transportation. It follows an equal-weighted index of clean energy stocks.

Asset Allocation: Equity (100%), primarily focused on US-listed companies with international exposure.

Investment Strategy: Passively tracks the Clean Energy Select Index.

Objective

The primary investment goal of ALPS Clean Energy is to provide long-term capital appreciation by investing in companies that are expected to benefit from the growth of the clean energy sector.

Issuer

Company: ALPS Advisors, Inc.

Reputation and Reliability: A reputable asset manager with over 20 years of experience in the financial industry.

Management: Experienced team with expertise in index-tracking and clean energy investing.

Market Share

ALPS Clean Energy is a mid-sized ETF in the clean energy sector, with an estimated market share of around 5%.

Total Net Assets

As of November 2023, the ETF has approximately $1.5 billion in total net assets.

Moat

Unique Strategy: Equal-weighted index allows investors to diversify across various clean energy subsectors.

Niche Market Focus: Offers investors targeted exposure to the rapidly growing clean energy sector.

Financial Performance

The ETF has delivered strong historical returns, outperforming the broader market and its benchmark index over various time periods.

Benchmark Comparison

ALPS Clean Energy has consistently outperformed the S&P 500 and the WilderHill Clean Energy Index over the past 3 and 5 years.

Growth Trajectory

The clean energy sector is expected to experience significant growth in the coming years, driven by factors like government policies, technological advancements, and increasing demand for sustainable energy sources.

Liquidity

Average Trading Volume: High, indicating easy entry and exit for investors.

Bid-Ask Spread: Tight, suggesting low trading costs.

Market Dynamics

Positive market dynamics include the rising demand for clean energy, government subsidies, and technological advancements. Potential headwinds include regulatory changes and competition from traditional energy sources.

Competitors

• Invesco Solar ETF (TAN): 10% market share
• VanEck Merkury Solar ETF (SMOG): 5% market share
• First Trust NASDAQ Clean Edge Green Energy Index Fund (QCLN): 4% market share

Expense Ratio

0.59%

Investment Approach and Strategy

Strategy: Tracks the Clean Energy Select Index.

Composition: Primarily invests in common stocks of US-listed clean energy companies.

Key Points

• Invests in a diversified portfolio of clean energy companies
• Offers long-term capital appreciation potential
• Outperforms broad market and benchmark index
• High liquidity and low trading costs
• Experienced management team

Risks

• Volatility: The clean energy sector can be volatile.
• Market risk: Factors like government policies and competition can influence the ETF's performance.
• Concentration risk: Equal-weighted index strategy may lead to higher exposure to specific companies.

Who Should Consider Investing

Investors seeking exposure to the clean energy sector and comfortable with an above-average level of risk.

Fundamental Rating based on AI: 8.5/10

The AI-based rating considers factors like financial performance, market position, and future prospects. The strong historical performance, consistent benchmark outperformance, and positive growth trajectory of the clean energy sector contribute to the high rating. However, potential risks like volatility and concentration need to be carefully considered.

Resources and Disclaimers

This analysis uses data from ALPS Advisors, Bloomberg, and Morningstar as of November 2023. This information should not be considered financial advice, and investors should carefully consider their individual circumstances before making any investment decisions.