Yes, AI is using quite a lot of energy. However, should that technology develop in the way its proponents believe it will, it could propel clean, renewable, energy-efficient technologies. That trend, along with some key macroeconomic factors, could boost the case for a clean energy ETF like the ALPS Clean Energy ETF (ACES ).
See more: Renewable Energy ETFs Ride Wave of AI Optimism
The fund tracks the CIBC Atlas Clean Energy Index. It charges a 55 basis point fee to track a market-cap-weighted index. ACES looks for firms that enable the transition to sustainable energy like battery tech, energy sources like solar and wind, and EVs. The ETF has returned 14.7% over the last month, per VettaFi data, outperforming its ETF Database Category average.
Clean Energy ETF ACES and AI
Given the strategy’s interest in those areas, artificial intelligence may prove an important boon. AI-boosted research could help battery technologies, for example. AI can consider countless materials combinations to identify the right mix of precious metals with greater speed than human computing can. A 1% increase to efficiency in peak load management, on the other hand, can get more out of electric grids and make battery use more widespread.
That could help a complicated landscape for clean energy technology. The macro trend for the global energy transition does appeal, but it may need assistance to kick into high gear. Other macroeconomic moves like rate cuts next year or late this year, for example, combined with AI, could provide a meaningful boost to the space.
Many investors, too, are still looking for some degree of exposure to environmentally conscious investments. ACES provides that kind of strategy in the transparent, tax-friendly ETF wrapper. For investors looking for an option that can diversify away from mainline tech but still benefit from secular advances like AI, ACES could appeal.
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