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Is Invesco Global Clean Energy ETF (PBD) a Strong ETF Right Now?
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Designed to provide broad exposure to the Alternative Energy ETFs category of the market, the Invesco Global Clean Energy ETF (PBD - Free Report) is a smart beta exchange traded fund launched on 06/13/2007.
What Are Smart Beta ETFs?
Products that are based on market cap weighted indexes, which are strategies designed to reflect a specific market segment or the market as a whole, have traditionally dominated the ETF industry.
Because market cap weighted indexes provide a low-cost, convenient, and transparent way of replicating market returns, they work well for investors who believe in market efficiency.
On the other hand, some investors who believe that it is possible to beat the market by superior stock selection opt to invest in another class of funds that track non-cap weighted strategies--popularly known as smart beta.
Non-cap weighted indexes try to choose stocks that have a better chance of risk-return performance, which is based on specific fundamental characteristics, or a mix of other such characteristics.
While this space offers a number of choices to investors, including simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies, not all these strategies have been able to deliver superior results.
Fund Sponsor & Index
The fund is sponsored by Invesco. It has amassed assets over $414.77 million, making it one of the average sized ETFs in the Alternative Energy ETFs. PBD, before fees and expenses, seeks to match the performance of the WilderHill New Energy Global Innovation Index.
This Index is an index comprised primarily of companies whose technologies focus on the generation and use of cleaner energy, conservation and efficiency & the advancement of renewable energy in general, as determined by WilderHill New Energy Finance, LLC.The New Energy Global Index is mainly comprised of companies in wind, solar, biofuels, hydro, wave & tidal, geothermal.
Cost & Other Expenses
Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.
Annual operating expenses for this ETF are 0.75%, making it one of the most expensive products in the space.
PBD's 12-month trailing dividend yield is 0.53%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
Looking at individual holdings, Solarpack Corp Tecnologica Sa accounts for about 1.07% of total assets, followed by Jinkosolar Holding Co Ltd Adr (JKS - Free Report) and Sunrun Inc (RUN - Free Report) .
The top 10 holdings account for about 9.78% of total assets under management.
Performance and Risk
Year-to-date, the Invesco Global Clean Energy ETF has lost about -16.16% so far, and is up about 46.74% over the last 12 months (as of 09/10/2021). PBD has traded between $20.08 and $40.71 in this past 52-week period.
The fund has a beta of 1.21 and standard deviation of 31.47% for the trailing three-year period, which makes PBD a high risk choice in this particular space. With about 141 holdings, it effectively diversifies company-specific risk.
Alternatives
Invesco Global Clean Energy ETF is a reasonable option for investors seeking to outperform the Alternative Energy ETFs segment of the market. However, there are other ETFs in the space which investors could consider.
IShares ESG Aware MSCI EM ETF (ESGE - Free Report) tracks MSCI Emerging Markets ESG Focus Index and the iShares ESG Aware MSCI USA ETF (ESGU - Free Report) tracks MSCI USA ESG Focus Index. IShares ESG Aware MSCI EM ETF has $7.08 billion in assets, iShares ESG Aware MSCI USA ETF has $22.30 billion. ESGE has an expense ratio of 0.25% and ESGU charges 0.15%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Alternative Energy ETFs.
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.
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Is Invesco Global Clean Energy ETF (PBD) a Strong ETF Right Now?
Designed to provide broad exposure to the Alternative Energy ETFs category of the market, the Invesco Global Clean Energy ETF (PBD - Free Report) is a smart beta exchange traded fund launched on 06/13/2007.
What Are Smart Beta ETFs?
Products that are based on market cap weighted indexes, which are strategies designed to reflect a specific market segment or the market as a whole, have traditionally dominated the ETF industry.
Because market cap weighted indexes provide a low-cost, convenient, and transparent way of replicating market returns, they work well for investors who believe in market efficiency.
On the other hand, some investors who believe that it is possible to beat the market by superior stock selection opt to invest in another class of funds that track non-cap weighted strategies--popularly known as smart beta.
Non-cap weighted indexes try to choose stocks that have a better chance of risk-return performance, which is based on specific fundamental characteristics, or a mix of other such characteristics.
While this space offers a number of choices to investors, including simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies, not all these strategies have been able to deliver superior results.
Fund Sponsor & Index
The fund is sponsored by Invesco. It has amassed assets over $414.77 million, making it one of the average sized ETFs in the Alternative Energy ETFs. PBD, before fees and expenses, seeks to match the performance of the WilderHill New Energy Global Innovation Index.
This Index is an index comprised primarily of companies whose technologies focus on the generation and use of cleaner energy, conservation and efficiency & the advancement of renewable energy in general, as determined by WilderHill New Energy Finance, LLC.The New Energy Global Index is mainly comprised of companies in wind, solar, biofuels, hydro, wave & tidal, geothermal.
Cost & Other Expenses
Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.
Annual operating expenses for this ETF are 0.75%, making it one of the most expensive products in the space.
PBD's 12-month trailing dividend yield is 0.53%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
Looking at individual holdings, Solarpack Corp Tecnologica Sa accounts for about 1.07% of total assets, followed by Jinkosolar Holding Co Ltd Adr (JKS - Free Report) and Sunrun Inc (RUN - Free Report) .
The top 10 holdings account for about 9.78% of total assets under management.
Performance and Risk
Year-to-date, the Invesco Global Clean Energy ETF has lost about -16.16% so far, and is up about 46.74% over the last 12 months (as of 09/10/2021). PBD has traded between $20.08 and $40.71 in this past 52-week period.
The fund has a beta of 1.21 and standard deviation of 31.47% for the trailing three-year period, which makes PBD a high risk choice in this particular space. With about 141 holdings, it effectively diversifies company-specific risk.
Alternatives
Invesco Global Clean Energy ETF is a reasonable option for investors seeking to outperform the Alternative Energy ETFs segment of the market. However, there are other ETFs in the space which investors could consider.
IShares ESG Aware MSCI EM ETF (ESGE - Free Report) tracks MSCI Emerging Markets ESG Focus Index and the iShares ESG Aware MSCI USA ETF (ESGU - Free Report) tracks MSCI USA ESG Focus Index. IShares ESG Aware MSCI EM ETF has $7.08 billion in assets, iShares ESG Aware MSCI USA ETF has $22.30 billion. ESGE has an expense ratio of 0.25% and ESGU charges 0.15%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Alternative Energy ETFs.
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.