ETFdb Logo
  • ETF Database
  • Channels
    • Themes
      • Active ETF
      • Alternatives Channel
      • Artificial Intelligence
      • China Insights
      • Climate Insights
      • Core Strategies
      • Crypto
      • Disruptive Technology
      • Energy Infrastructure
      • ETF Building Blocks
      • ETF Education
      • ETF Investing
      • ETF Strategist
      • Faith-Based Investing
      • Financial Literacy
      • Fixed Income
      • Free Cash Flow
      • Innovative ETFs
      • Invest Beyond Cash
      • Leveraged & Inverse
      • Modern Alpha
      • Portfolio Strategies
      • Tax Efficient Income
    • Asset Class
      • Equity
        • U.S. Equity
        • Int'l Developed
        • Emerging Market Equities
      • Alternatives
        • Gold/Silver/Critical Materials
        • Crypytocurrency
        • Currency
        • Volatility
      • Fixed Income
        • Investment Grade Corporates
        • US Treasuries & TIPS
        • High Yield Corporates
        • Int'l Fixed Income
    • ETF Ecosystem
    • ETFs in Canada
    • Market Outlook
    • Crypto ETF Hub
  • Tools
    • ETF Screener
    • ETF Country Exposure Tool
    • ETF Database Categories
    • Indexes
    • Scenario Analysis
    • Watchlists
    • Head-To-Head ETF Comparison Tool
    • Mutual Fund To ETF Converter
    • ETF Stock Exposure Tool
    • ETF Issuer Fund Flows
  • Research
    • ETF Education
    • Equity Investing
    • Dividend ETFs
    • Leveraged ETFs
    • Inverse ETFs
    • Index Education
    • Index Insights
    • Top ETF Sectors
    • Top ETF Issuers
    • Top ETF Industries
  • Webcasts
  • Themes
    • AI ETFs
    • Blockchain ETFs
    • See all Thematic Investing ETF themes
    • ESG Investing
    • Marijuana ETFs
  • Multimedia
    • ETF 360 Video Series
    • ETF of the Week Podcast
    • Gaining Perspective Podcast
    • ETF Prime Podcast
    • Video
  • Company
    • About VettaFi
    • Get VettaFi’ed
  • PRO
    • Pro Content
    • Pro Tools
    • Advanced
    • FAQ
    • Pricing
    • Free Sign Up
    • Login
  1. ETF Building Blocks Channel
  2. Tax-Loss Harvesting? Begin With Clean Energy ETFs
ETF Building Blocks Channel
Share

Tax-Loss Harvesting? Begin With Clean Energy ETFs

Elle Caruso FitzgeraldNov 06, 2023
2023-11-06

As advisors consider tax-loss harvesting, clean energy ETFs are a good place to start.

With clean energy ETFs down significantly year to date, advisors can sell out of clients’ current positions to harvest losses and enhance exposure to the space.

Despite a very constructive policy background, clean energy ETFs have struggled in 2023. Clean energy technology tends to be very sensitive to interest rates, causing the segment to struggle as the Federal Reserve has lifted rates to a 22-year high.

Despite the current headwinds, it’s important to recognize the long-term opportunities for clean energy ETFs. U.S. Congress last year passed the Inflation Reduction Act (IRA) of 2022, marking the country’s most significant climate legislation. The law directs at least $369 billion toward incentives encouraging the adoption of renewable energy and other low-carbon technologies.

Advisors may consider selling positions in the iShares Global Clean Energy ETF (ICLN A+) and instead allocate to the ALPS Clean Energy ETF (ACES A-). Both funds have seen significant drawdowns year to date, but ACES is outpacing ICLN by nearly 200 basis points in 2023 and may improve exposure to the space.

While both funds offer exposure to the clean energy space, they provide unique exposures. SolarEdge Technologies (SEDG) has been among the segment’s worst-performing stocks this year. Shares of the company are down over 75% year to date as of November 6. Notably, SolarEdge is a top holding in ICLN but is not included in ACES.

Tax-Loss Harvesting

Understandably, no investor wants to lose money on an investment. The upside is that these losses can potentially be used to help reduce one’s tax bill.

Tax-loss harvesting involves selling investments at a loss, then using the capital losses to offset capital gains and/or ordinary income. If losses exceed gains or only losses are incurred, up to $3,000 can be used to offset ordinary income in the current year. Notably, any amount above $3,000 can be carried forward for use in future years.

The final step using the money from the sale to replace the investment. Investors can either maintain the portfolio’s existing asset allocation or invest in a new area.

For more news, information, and analysis, visit the ETF Building Blocks Channel.


Content continues below advertisement

Loading Articles...
Our Sites
  • VettaFi
  • Advisor Perspectives
  • ETF Trends
Tools
  • ETF Screener
  • Mutual Fund to ETF Converter
  • Head-To-Head ETF Comparison
  • ETF Country Exposure Tool
  • ETF Stock Exposure Tool
  • ETF Database Pro
More Tools
  • Financial Advisor & RIA Center
Explore ETFs
  • ETF News
  • ETF Category Reports
  • Premium Articles
  • Alphabetical Listing of ETFs
  • Browse ETFs by ETF Database Category
  • Browse ETFs by Index
  • Browse ETFs by Issuer
  • Compare ETFs
Information
  • Contact Us
  • Terms of Use and Privacy Policy
  • © 2025 VettaFi LLC. All rights reserved.

Advertisement

Is Your Portfolio Positioned With Enough Global Exposure?

ETF Education Channel

How to Allocate Commodities in Portfolios

Tom LydonApr 26, 2022
2022-04-26

A long-running debate in asset allocation circles is how much of a portfolio an investor should...

Core Strategies Channel

Why ETFs Experience Limit Up/Down Protections

Karrie GordonMay 13, 2022
2022-05-13

In a digital age where information moves in milliseconds and millions of participants can transact...

}
X