ETFs
The Best Performing ETFs in the Best Performing Sector for May
After a dismal performance in the first four months, the renewable energy sector saw a remarkable comeback in May, driven by optimism surrounding artificial intelligence (AI). As AI has become the main investment theme, the need for renewable electricity has increased for data centers running AI applications.
Given this, we have highlighted the five best-performing ETFs in the sector that dominated the market in May. These are Global X Hydrogen ETF HYDR, Defiance Next Generation H2 ETF BRDH, First Trust NASDAQ Clean Edge Green Energy Index Fund QCLN, ALPS Clean Energy ETF ACE and Fidelity Clean Energy ETF FRNW.
AI at the service of renewable energies
Renewable energy stocks have started to benefit from the AI boom. Artificial intelligence is poised to accelerate and propel the energy transition, being both a large consumer and facilitator of clean energy. On average, processing a ChatGPT query requires almost 10 times more electricity than a Google search. Goldman Sachs expects AI to increase data center energy demand by 160% by 2030 (read: AI and the Fed Boosting the Stock Market? ETFs to Bet On).
Currently, data centers around the world consume 1-2% of total energy, but this percentage will likely reach 3-4% by the end of the decade. Growing demand for data centers will continue to fuel the need for renewable electricity.
According to the latest International Energy Agency, by 2026, the AI industry is expected to consume at least 10 times more electricity than in 2023.
Additionally, tech titans Alphabet (GOOGL) and Microsoft (MSFT), which have doubled their investments in AI, pledged to accelerate advanced clean electricity technology and achieve 24-hour carbon-free energy 24/7 by 2030.
Other factors
Sales of electric vehicles (EVs) have increased significantly in recent years, driving demand for electricity to power these vehicles. As electric vehicle users are already environmentally conscious, their electricity is generated from green and renewable sources such as wind, solar and hydroelectric power.
Thanks to advances in clean technology and growing support from governments, the renewable energy sector is poised for significant growth.
Here we have profiled the ETFs mentioned above:
Defiance Next Gen H2 ETF (HDRO) – Up 27.3%
The Defiance Next Gen H2 ETF tracks the BlueStar Global Hydrogen & Next Gen Fuel Cell Index. The rules-based index tracks the performance of a group of globally listed stocks and companies that generate at least 50% of their revenues from their involvement in the development of energy-based sources. hydrogen, fuel cell technologies and industrial gases.
The Defiance Next Gen H2 ETF has accumulated $25.5 million in its asset base and charges 30 basis points in annual fees. It trades an average daily volume of 21,000 shares.
Global X Hydrogen ETF (HYDR) – Up 26.5%
The Global X Hydrogen ETF seeks to invest in companies that could benefit from advancements in the global hydrogen industry. This includes companies involved in the production of hydrogen, the integration of hydrogen into energy systems and the development/manufacture of hydrogen fuel cells, electrolyzers and other technologies related to the use of hydrogen. hydrogen as a source of energy. HYDR tracks the Solactive Global Hydrogen Index and holds 26 stocks in its basket (read: Top 3 ETF Areas from Last Week).
The Global X Hydrogen ETF has amassed $51.6 million in its asset base and charges 50 basis points in annual fees. It trades with an average daily volume of 77,000 shares.
First Trust NASDAQ Clean Edge Green Energy Index Fund (QCLN) – Up 16%
The First Trust NASDAQ Clean Edge Green Energy Index Fund provides exposure to companies engaged in the manufacturing, development, distribution and installation of emerging clean energy technologies, including solar photovoltaics, wind energy, advanced batteries, fuel cells and electric vehicles. It tracks the Nasdaq Clean Edge Green Energy Index and holds 56 stocks in its basket.
The First Trust NASDAQ Clean Edge Green Energy Index Fund manages assets worth $787.5 million and charges 59 basis points in fees per year. The product trades in an average daily volume of 169,000 shares and has a Zacks ETF Rank #3 (Hold).
ALPS Clean Energy ETF (ACES) – Up 14.6%
ALPS Clean Energy ETF provides exposure to a diverse set of U.S. and Canadian companies involved in the clean energy sector, including renewable energy and clean technology. It tracks the CIBC Atlas Clean Energy Index and holds 40 stocks in its basket.
ALPS Clean Energy ETF has amassed $215.6 million in its asset base and charges investors 55 basis points in fees annually. It trades an average daily volume of 167,000 shares.
Fidelity Clean Energy ETF (FRNW) – Up 13.9%
The Fidelity Clean Energy ETF tracks the Fidelity Clean Energy Index, which measures the performance of a global universe of companies across the market capitalization spectrum that distribute, produce or supply technology or equipment to support energy production at from solar, wind, hydrogen and other renewable energies. sources. He holds 64 stocks in his basket and charges 39 basis points in fees per year to investors.
The Fidelity Clean Energy ETF has accumulated $28.8 million in its asset base while trading a volume of 6,000 shares per day on average.
The story continues
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First Trust NASDAQ Clean Edge Green Energy ETF (QCLN): ETF Research Reports
ALPS Clean Energy ETF (ACES): ETF Research Reports
Defiance Next Gen H2 ETF (HDRO): ETF Research Reports
Global X Hydrogen ETF (HYDR): ETF Research Reports
Fidelity Clean Energy ETF (FRNW): ETF Research Reports