High energy prices have reignited positive clean energy sentiment, propelling ETFs offering exposure to the energy transition higher.
The ALPS Clean Energy ETF (ACES ) rallied earlier this month as high energy prices, resulting from the Russia-Ukraine conflict and ensuing sanctions, have global governments scrambling for alternative energy solutions, according to ALPS.
The electric vehicle companies included in ACES – comprising 28.49% of the fund – rose over 2% after the Biden administration invoked The Defense Production Act with $750 million to boost U.S. production of materials needed for EVs and EV infrastructure, ALPS wrote in an insight.
A potential cease-fire in the Russia-Ukraine war last week was also positive for EV names as Russia accounts for nearly 20-30% of global nickel and palladium production that goes into lithium-ion EV batteries, according to Mining.com.
Top-performing holdings include Workhorse Group Inc. (WKHS, 0.52% weight), an EV and electric aircraft developer, which gained nearly 10% on the cease-fire news, as well as EV charging company, Chargepoint Holdings Inc. (CHPT, 3.78% weight), which gained nearly 7% on continued partnerships. V giant, Tesla Inc. (TSLA, 5.64% weight), also gained 7% after announcing a future stock split two weeks ago.
The hydro/ geothermal holdings in ACES have also risen, propelled by Brookfield Renewable Partners LP. (BEP-U CN, 4.83% weight) gaining over 3% after inking a $300 million investment agreement with Entropy Inc. to scale its carbon capture technology, according to ALPS.
Geothermal energy developer, Ormat Technologies Inc. (ORA, 3.06% weight), jumped nearly 5% the week of April 1 following positive commentary from the company’s investor day, where management cited “massive potential” for geothermal growth in the U.S, according to ALPS.
ACES’ largest holdings include Enphase Energy (5/68%), Tesla (5.64%), Plug Power (5.36%), First Solar (5.10%), and Sunrun (5.05%), according to ETF Database.
Other funds offering exposure to the energy transition include the SPDR S&P Kensho Clean Power ETF (CNRG ) and the First Trust NASDAQ Clean Edge Green Energy Index Fund (QCLN ).
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