Is Invesco Global Clean Energy ETF (PBD) a Strong ETF Right Now?
Smart Beta ETF report for PBD
The Invesco Global Clean Energy ETF (PBD) was launched on 06/13/2007, and is a smart beta exchange traded fund designed to offer broad exposure to the Alternative Energy ETFs category of the market.
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.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
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 managed by Invesco. PBD has been able to amass assets over $388.37 million, making it one of the average sized ETFs in the Alternative Energy ETFs. This particular fund seeks to match the performance of the WilderHill New Energy Global Innovation Index before fees and expenses.
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.
With one of the most expensive products in the space, this ETF has annual operating expenses of 0.75%.
The fund has a 12-month trailing dividend yield of 0.53%.
Sector Exposure and Top Holdings
Most ETFs are very transparent products, and disclose their holdings on a daily basis. ETFs also offer diversified exposure, which minimizes single stock risk, though it's still important for investors to research a fund's holdings.
Taking into account individual holdings, Solarpack Corp Tecnologica Sa (SPK) accounts for about 1.07% of the fund's total assets, followed by Jinkosolar Holding Co Ltd Adr (JKS) and Sunrun Inc (RUN).
Its top 10 holdings account for approximately 9.78% of PBD's total assets under management.
Performance and Risk
So far this year, PBD has lost about -24.03%, and was up about 11.82% in the last one year (as of 10/08/2021). During this past 52-week period, the fund has traded between $22.73 and $40.71.
The fund has a beta of 1.21 and standard deviation of 31.70% 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.
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) tracks MSCI Emerging Markets ESG Focus Index and the iShares ESG Aware MSCI USA ETF (ESGU) tracks MSCI USA ESG Focus Index. IShares ESG Aware MSCI EM ETF has $6.80 billion in assets, iShares ESG Aware MSCI USA ETF has $22.20 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.
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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Invesco Global Clean Energy ETF (PBD): ETF Research Reports
JinkoSolar Holding Company Limited (JKS): Free Stock Analysis Report
Sunrun Inc. (RUN): Free Stock Analysis Report
iShares ESG Aware MSCI EM ETF (ESGE): ETF Research Reports
iShares ESG Aware MSCI USA ETF (ESGU): ETF Research Reports
SPK Acquisition Corp. (SPK): Get Free Report
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