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Is Invesco Global Clean Energy ETF (PBD) a Strong ETF Right Now?
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A smart beta exchange traded fund, the Invesco Global Clean Energy ETF (PBD - Free Report) debuted on 06/13/2007, and offers broad exposure to the Alternative Energy ETFs category of the market.
What Are Smart Beta ETFs?
The ETF industry has long been dominated by products based on market cap weighted indexes, a strategy created to reflect the 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.
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.
These indexes attempt to select stocks that have better chances of risk-return performance, based on certain fundamental characteristics or a combination 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
Managed by Invesco, PBD has amassed assets over $220.94 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.
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
When considering an ETF's total return, expense ratios are an important factor. And, cheaper funds can significantly outperform their more expensive cousins in the long term if all other factors remain equal.
Annual operating expenses for this ETF are 0.75%, making it one of the most expensive products in the space.
It's 12-month trailing dividend yield comes in at 2.68%.
Sector Exposure and Top Holdings
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
Taking into account individual holdings, Zhejiang Leapmotor Technologies Ltd accounts for about 1.24% of the fund's total assets, followed by Sma Solar Technology Ag (S92) and Cadeler A/s (CADLR).
PBD's top 10 holdings account for about 5.17% of its total assets under management.
Performance and Risk
The ETF has gained about 11.22% so far this year and is down about -2.25% in the last one year (as of 02/21/2023). In the past 52-week period, it has traded between $17.65 and $25.67.
The fund has a beta of 1.31 and standard deviation of 37.94% for the trailing three-year period, which makes PBD a high risk choice in this particular space. With about 143 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 $7.15 billion in assets, iShares ESG Aware MSCI USA ETF has $19.93 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?
A smart beta exchange traded fund, the Invesco Global Clean Energy ETF (PBD - Free Report) debuted on 06/13/2007, and offers broad exposure to the Alternative Energy ETFs category of the market.
What Are Smart Beta ETFs?
The ETF industry has long been dominated by products based on market cap weighted indexes, a strategy created to reflect the 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.
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.
These indexes attempt to select stocks that have better chances of risk-return performance, based on certain fundamental characteristics or a combination 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
Managed by Invesco, PBD has amassed assets over $220.94 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.
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
When considering an ETF's total return, expense ratios are an important factor. And, cheaper funds can significantly outperform their more expensive cousins in the long term if all other factors remain equal.
Annual operating expenses for this ETF are 0.75%, making it one of the most expensive products in the space.
It's 12-month trailing dividend yield comes in at 2.68%.
Sector Exposure and Top Holdings
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
Taking into account individual holdings, Zhejiang Leapmotor Technologies Ltd accounts for about 1.24% of the fund's total assets, followed by Sma Solar Technology Ag (S92) and Cadeler A/s (CADLR).
PBD's top 10 holdings account for about 5.17% of its total assets under management.
Performance and Risk
The ETF has gained about 11.22% so far this year and is down about -2.25% in the last one year (as of 02/21/2023). In the past 52-week period, it has traded between $17.65 and $25.67.
The fund has a beta of 1.31 and standard deviation of 37.94% for the trailing three-year period, which makes PBD a high risk choice in this particular space. With about 143 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 $7.15 billion in assets, iShares ESG Aware MSCI USA ETF has $19.93 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.