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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?
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.
A good option for investors who believe in market efficiency, market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns.
If you're the kind of investor who would rather try and beat the market through good stock selection, then smart beta funds are your best choice; this fund class is known for tracking 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.
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
PBD is managed by Invesco, and this fund has amassed over $241.48 million, which makes it one of the average sized ETFs in the Alternative Energy ETFs. Before fees and expenses, PBD seeks to match the performance of the WilderHill New Energy Global Innovation Index.
The WilderHill New Energy Global Innovation Index is comprised of companies engaged in the business of the advancement of cleaner energy and conservation.
Cost & Other Expenses
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.
Operating expenses on an annual basis are 0.75% for PBD, making it one of the most expensive products in the space.
It's 12-month trailing dividend yield comes in at 1.14%.
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.
Taking into account individual holdings, Renewable Energy Group Inc accounts for about 1.40% of the fund's total assets, followed by Sociedad Quimica Y Minera De Chile Sa Adr (SQM - Free Report) and Azure Power Global Ltd .
The top 10 holdings account for about 11.49% of total assets under management.
Performance and Risk
So far this year, PBD has lost about -22.33%, and is down about -28.48% in the last one year (as of 06/13/2022). During this past 52-week period, the fund has traded between $18.84 and $32.33.
The ETF has a beta of 1.26 and standard deviation of 34.94% for the trailing three-year period, making it 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 $6.60 billion in assets, iShares ESG Aware MSCI USA ETF has $21.65 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?
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?
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.
A good option for investors who believe in market efficiency, market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns.
If you're the kind of investor who would rather try and beat the market through good stock selection, then smart beta funds are your best choice; this fund class is known for tracking 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.
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
PBD is managed by Invesco, and this fund has amassed over $241.48 million, which makes it one of the average sized ETFs in the Alternative Energy ETFs. Before fees and expenses, PBD seeks to match the performance of the WilderHill New Energy Global Innovation Index.
The WilderHill New Energy Global Innovation Index is comprised of companies engaged in the business of the advancement of cleaner energy and conservation.
Cost & Other Expenses
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.
Operating expenses on an annual basis are 0.75% for PBD, making it one of the most expensive products in the space.
It's 12-month trailing dividend yield comes in at 1.14%.
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.
Taking into account individual holdings, Renewable Energy Group Inc accounts for about 1.40% of the fund's total assets, followed by Sociedad Quimica Y Minera De Chile Sa Adr (SQM - Free Report) and Azure Power Global Ltd .
The top 10 holdings account for about 11.49% of total assets under management.
Performance and Risk
So far this year, PBD has lost about -22.33%, and is down about -28.48% in the last one year (as of 06/13/2022). During this past 52-week period, the fund has traded between $18.84 and $32.33.
The ETF has a beta of 1.26 and standard deviation of 34.94% for the trailing three-year period, making it 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 $6.60 billion in assets, iShares ESG Aware MSCI USA ETF has $21.65 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.