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Is Invesco Global Clean Energy ETF (PBD) a Strong ETF Right Now?
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The Invesco Global Clean Energy ETF (PBD - Free Report) made its debut on 06/13/2007, and is a smart beta exchange traded fund that provides broad exposure to the Alternative Energy ETFs category of the market.
What Are Smart Beta ETFs?
For a long time now, the ETF industry has been flooded with products based on market capitalization weighted indexes, which are designed to represent the broader market or a particular market segment.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
There are some investors, though, who think it's possible to beat the market with great stock selection; this group likely invests in another class of funds known as smart beta, which track non-cap weighted strategies.
This kind of index follows this same mindset, as it attempts to pick stocks that have better chances of risk-return performance; non-cap weighted strategies base selection on certain fundamental characteristics, or a mix of such characteristics.
Even though this space provides many choices to investors--think one of the simplest methodologies like equal-weighting and more complicated ones like fundamental and volatility/momentum based weighting--not all have been able to deliver first-rate results.
Fund Sponsor & Index
Managed by Invesco, PBD has amassed assets over $365.12 million, making it one of the average sized ETFs in the Alternative Energy ETFs. PBD 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
For ETF investors, expense ratios are an important factor when considering a fund's return; in the long-term, cheaper funds actually have the ability to outperform their more expensive cousins if all other things remain the same.
With one of the most expensive products in the space, this ETF has annual operating expenses of 0.75%.
It's 12-month trailing dividend yield comes in at 0.50%.
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.
When you look at individual holdings, Bloom Energy Corp (BE - Free Report) accounts for about 1.19% of the fund's total assets, followed by Plug Power Inc (PLUG - Free Report) and Sunpower Corp (SPWR - Free Report) .
The top 10 holdings account for about 10.73% of total assets under management.
Performance and Risk
Year-to-date, the Invesco Global Clean Energy ETF has lost about -19.16% so far, and is down about -3.29% over the last 12 months (as of 12/08/2021). PBD has traded between $26.39 and $40.71 in this past 52-week period.
PBD has a beta of 1.25 and standard deviation of 31.68% for the trailing three-year period, which makes the fund a high risk choice in the space. With about 139 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 EAFE ETF (ESGD - Free Report) tracks MSCI EAFE ESG Focus Index and the iShares ESG Aware MSCI USA ETF (ESGU - Free Report) tracks MSCI USA ESG Focus Index. IShares ESG Aware MSCI EAFE ETF has $7.37 billion in assets, iShares ESG Aware MSCI USA ETF has $24.83 billion. ESGD has an expense ratio of 0.20% 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?
The Invesco Global Clean Energy ETF (PBD - Free Report) made its debut on 06/13/2007, and is a smart beta exchange traded fund that provides broad exposure to the Alternative Energy ETFs category of the market.
What Are Smart Beta ETFs?
For a long time now, the ETF industry has been flooded with products based on market capitalization weighted indexes, which are designed to represent the broader market or a particular market segment.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
There are some investors, though, who think it's possible to beat the market with great stock selection; this group likely invests in another class of funds known as smart beta, which track non-cap weighted strategies.
This kind of index follows this same mindset, as it attempts to pick stocks that have better chances of risk-return performance; non-cap weighted strategies base selection on certain fundamental characteristics, or a mix of such characteristics.
Even though this space provides many choices to investors--think one of the simplest methodologies like equal-weighting and more complicated ones like fundamental and volatility/momentum based weighting--not all have been able to deliver first-rate results.
Fund Sponsor & Index
Managed by Invesco, PBD has amassed assets over $365.12 million, making it one of the average sized ETFs in the Alternative Energy ETFs. PBD 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
For ETF investors, expense ratios are an important factor when considering a fund's return; in the long-term, cheaper funds actually have the ability to outperform their more expensive cousins if all other things remain the same.
With one of the most expensive products in the space, this ETF has annual operating expenses of 0.75%.
It's 12-month trailing dividend yield comes in at 0.50%.
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.
When you look at individual holdings, Bloom Energy Corp (BE - Free Report) accounts for about 1.19% of the fund's total assets, followed by Plug Power Inc (PLUG - Free Report) and Sunpower Corp (SPWR - Free Report) .
The top 10 holdings account for about 10.73% of total assets under management.
Performance and Risk
Year-to-date, the Invesco Global Clean Energy ETF has lost about -19.16% so far, and is down about -3.29% over the last 12 months (as of 12/08/2021). PBD has traded between $26.39 and $40.71 in this past 52-week period.
PBD has a beta of 1.25 and standard deviation of 31.68% for the trailing three-year period, which makes the fund a high risk choice in the space. With about 139 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 EAFE ETF (ESGD - Free Report) tracks MSCI EAFE ESG Focus Index and the iShares ESG Aware MSCI USA ETF (ESGU - Free Report) tracks MSCI USA ESG Focus Index. IShares ESG Aware MSCI EAFE ETF has $7.37 billion in assets, iShares ESG Aware MSCI USA ETF has $24.83 billion. ESGD has an expense ratio of 0.20% 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.