Invesco Global Clean Energy ETF

PBD

Market cap $148M

Despite policy headwinds, surging AI-driven power demand and falling renewable costs are powering clean energy ETFs higher.

It may not have been on your investment bingo card, but one of the surprising outperforming investment themes this year has been clean energy. One catalyst has been the growing electricity demands related to the rise of AI.

The global energy transition is driving massive investments in renewable energy, benefiting companies from various areas of the energy industry. Areas such as grids and storage are crucial to the success of the energy transition. At the same time, the focus is also on the modernization and flexibilization of the energy infrastructure.

The Invesco Global Clean Energy ETF offers global exposure to the clean energy sector, covering solar, wind, and hydroelectric power, making it a smart investment choice. PBD follows the WilderHill New Energy Global Innovation Index, providing diversified holdings in companies leading clean energy innovation across North America, Europe, and Asia. The fund's broad approach reduces risks associated with sector-specific downturns, outperforming other ETFs like PBW due to its global diversification.

2023 was a record-breaking year for clean energy usage, further highlighting the global push to reduce emissions. The transition underscores a pair of exchange-traded fund (ETF) opportunities to capitalize on the growth: the Invesco Global Clean Energy ETF (PBD) and the Invesco WilderHill Clean Energy ETF (PBW).

The world is fighting to go green. So, it's a good idea to have exposure to some of the best renewable energy stocks to buy in April.

It's been a lengthy run of disappointment for clean energy equities and the related exchange traded funds. The early innings of 2024 haven't brought any signs of relief for these downtrodden assets.

Investors who piled into clean energy themes the last few years are experiencing some performance pain this year, as we appear to be experiencing a detour on the road to the clean energy transition. Related themes have been hard hit this year due to a confluence of events.

The Invesco Global Clean Energy ETF tracks the WilderHill New Energy Global Innovation Index and invests in clean energy companies. PBD's broad portfolio allocation is eroding its performance compared to more narrowly focused funds in the clean energy space. The fund's smart beta approach and rules-based investing strategy are not generating returns that beat the broad market, and its risk/return profile is unattractive.

The global transition to alternative energy sources is evident in China's push to lower its emissions output. Investment in clean energy can help propel the Invesco Global Clean Energy ETF (PBD), which offers country exposure to Chinese equities.