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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 traditionally been dominated by products based on market capitalization weighted indexes that are designed to represent the market or a particular segment of the market.
Market cap weighted indexes work great for investors who believe in market efficiency. They provide a low-cost, convenient and transparent way of replicating market returns.
However, some investors believe in the possibility of beating the market through exceptional stock selection, and choose a different type of fund that tracks non-cap weighted strategies: smart beta.
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.
The smart beta space gives investors many different choices, from equal-weighting, one of the simplest strategies, to more complicated ones like fundamental and volatility/momentum based weighting. However, not all of these methodologies have been able to deliver remarkable returns.
Fund Sponsor & Index
Managed by Invesco, PBD has amassed assets over $200.09 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.
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 has a 12-month trailing dividend yield of 3.16%.
Sector Exposure and Top Holdings
Most ETFs are very transparent products, and disclose their holdings on a daily basis. ETFs also offer diversified exposure, which minimizes single stock risk, though it's still important for investors to research a fund's holdings.
Looking at individual holdings, Ecopro Bm Co Ltd accounts for about 1.38% of total assets, followed by Teco Electric And Machinery Co Ltd and Sma Solar Technology Ag (S92).
Its top 10 holdings account for approximately 12.21% of PBD's total assets under management.
Performance and Risk
The ETF has added about 4.62% so far this year and is down about -0.38% in the last one year (as of 07/04/2023). In the past 52-week period, it has traded between $17.65 and $25.04.
The fund has a beta of 1.31 and standard deviation of 32.28% for the trailing three-year period, which makes PBD a high risk choice in this particular space. With about 121 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 $7.47 billion in assets, iShares ESG Aware MSCI USA ETF has $14.53 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 traditionally been dominated by products based on market capitalization weighted indexes that are designed to represent the market or a particular segment of the market.
Market cap weighted indexes work great for investors who believe in market efficiency. They provide a low-cost, convenient and transparent way of replicating market returns.
However, some investors believe in the possibility of beating the market through exceptional stock selection, and choose a different type of fund that tracks non-cap weighted strategies: smart beta.
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.
The smart beta space gives investors many different choices, from equal-weighting, one of the simplest strategies, to more complicated ones like fundamental and volatility/momentum based weighting. However, not all of these methodologies have been able to deliver remarkable returns.
Fund Sponsor & Index
Managed by Invesco, PBD has amassed assets over $200.09 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.
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 has a 12-month trailing dividend yield of 3.16%.
Sector Exposure and Top Holdings
Most ETFs are very transparent products, and disclose their holdings on a daily basis. ETFs also offer diversified exposure, which minimizes single stock risk, though it's still important for investors to research a fund's holdings.
Looking at individual holdings, Ecopro Bm Co Ltd accounts for about 1.38% of total assets, followed by Teco Electric And Machinery Co Ltd and Sma Solar Technology Ag (S92).
Its top 10 holdings account for approximately 12.21% of PBD's total assets under management.
Performance and Risk
The ETF has added about 4.62% so far this year and is down about -0.38% in the last one year (as of 07/04/2023). In the past 52-week period, it has traded between $17.65 and $25.04.
The fund has a beta of 1.31 and standard deviation of 32.28% for the trailing three-year period, which makes PBD a high risk choice in this particular space. With about 121 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 $7.47 billion in assets, iShares ESG Aware MSCI USA ETF has $14.53 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.