A lens over seven ASX-listed power-packed clean energy ETFs

Highlights

  • Investing in renewable energy and clean energy ETFs could be a lucrative way to combat climate change.
  • ETFs allow investors to invest in a particular sector, index, or commodity rather than a specific company.
  • Various exchange-traded funds (ETFs) listed on the ASX have delivered noteworthy returns in the last year.

Exchange-traded funds (ETF) is a type of security that tracks a sector, index, or commodity, which can be sold or purchased on a stock exchange in a similar fashion to a regular stock.  Renewable energy ETFs primarily focus on investing in the stocks that are engaged in harnessing energy from a renewable source like solar, wind, geothermal, or any other alternate source of energy apart from conventional sources.

Investing in renewable energy and clean energy ETFs could be a lucrative way to combat climate change. The rise in the demand for clean energy and increasing popularity of the Environmental, Social, and Governance (ESG) metrics among investors has turned the corners.

In April 2021, US President Joe Biden announced a new goal to achieve 50% emission reduction from 2005 levels by 2030, more than double the country's prior goal as per the 2015 Paris Agreement.

Related Article: Are ETFs good for investment?

Since the clean energy boom is a new trend in the market, it is not easy to track the performance of an individual company. In such a scenario, it may be better to invest in the consolidated sector, which has more chances to grow, rather than predicting the performance of any specific company.

Given this backdrop, let’s have a look at seven power-packed clean energy and renewable energy ETFs based on their yearly returns.

eInvest Better Future Fund

eInvest Better Future Fund (ASX:IMPQ) is a managed fund with geographical exposure of the companies investing in the renewable and clean energy sector across Australia and New Zealand, the UK, and the US. The fund invests in ethically responsible Small Caps and aims at contributing positively, ethically, and sustainably to the environment and society.

Top Holdings: Integral Diagnostics Limited, Spark New Zealand, Telix Pharmaceuticals, Iress Limited, Steadfast Group Limited

Related Read: Three ASX ETFs that give investors access to US markets

Betashares Global Sustainability Leaders

Betashares Global Sustainability Leaders (ASX:ETHI) is an Equity World Large Growth fund that invests in large companies listed across the globe and are known for their low-carbon footprints. The ETF has geographical exposure to the companies operating in Denmark, Finland, France, Germany, Hong Kong, Japan, etc.

Top Holdings: NVIDIA Corp, Apple Inc, Visa Inc, Home Depot Inc, Mastercard Inc

Intelligent Investor Ethical Share Fund (Managed Fund)

Intelligent Investor Ethical Share Fund (Managed Fund) (ASX:INES) invests in undervalued stocks on the basis of ESG factors and financial criteria to achieve capital growth. The fund invests in large companies present across Australia and New Zealand.

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Top Holdings: Frontier Digital Ventures Limited, Audinate Group Limited, Uniti Group Limited, Sydney Airport, 360 Capital Group

Vanguard Ethically Conscious International Shares Index ETF

Vanguard Ethically Conscious International Shares Index ETF (ASX:VESG) invests in big companies listed worldwide. The fund may also invest in futures trading on a licensed exchange, securities that are expected to be included in the index or have been removed.

The fund has geographical exposure to the companies present in Canada, France, Germany, Japan, Netherlands, South Korea, etc.

Top Holdings: Apple Inc, Microsoft Corp, Amazon.com Inc, Facebook Inc, Tesla Inc

Related Read: Which are the most exciting ASX-listed ethical ETFs?

ETFS Battery Tech & Lithium ETF

ETFS Battery Tech & Lithium ETF (ASX:ACDC) invests in large-cap companies of China, Australia, France, Germany, Japan, etc. The ETF invests in stocks of the companies that are engaged in certain electro-chemical energy storage technology and companies dealing in the mining of battery metals.

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Top Holdings: Byd Co Ltd Class H, Pilbara Minerals Limited, Eos Energy Enterprises Inc Ordinary Shares Class A, Mineral Resources Limited, Solaredge Technologies Inc

VanEck Vectors MSCI Australian Sustainable Equity ETF

VanEck Vectors MSCI Australian Sustainable Equity ETF (ASX:GRNV) makes more than 97% of its investment in the stocks of companies that have a market cap of more than AU$1 billion. The ETF invests in companies listed across Australia, New Zealand, and the EU. Moreover, these companies also have a proven track record in ESG performance and are socially responsible. Basic material, industrial and financial services are among the top holdings of the ETF.

Top Holdings: Telstra Corporation Limited., Goodman Group, Fortescue Metals Group Ltd, CSL Limited, Australia and New Zealand Banking Group Limited

Must Watch: How do ETFs stack up against CFDs? Seven things you should know

Russell Investments Australian Responsible Investment ETF 

Russell Investments Australian Responsible Investment ETF (ASX:RARI) invests predominantly in Australian shares and trusts listed on the ASX that demonstrate positive ESG characteristics. The ETF's more than 94% holdings are large-cap companies having a market cap greater than AU$1 billion.

Top Holdings: Commonwealth Bank of Australia, Westpac Banking Corporation, National Australia Bank Limited, Australia and New Zealand Banking Group Limited, Wesfarmers Limited

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