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After a Tough 2023, Can Wind Energy ETFs Rebound in 2024?
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The global outlook for wind stocks in 2024 shows a mixed picture with several challenges and opportunities across different regions. In the United States, the offshore wind industry faces some hurdles, particularly related to the installation of wind turbines due to a century-old law that restricts the use of foreign vessels for such operations. High interest rates and inflation have strained project financing.
This has led to delays and increased costs in projects. Despite these challenges, there is progress with the anticipated completion of a US-built ship for turbine installation and tax incentives under the Inflation Reduction Act.
However, meeting the Biden administration's target of 30 gigawatts of offshore wind capacity by 2030 appears challenging, with projections suggesting the country might achieve only about half of this goal???, per MIT technology review.
In Europe, the outlook is more positive, with significant new offshore wind auctions planned in 2024, totaling approximately 50 gigawatts. This suggests a strong commitment to expanding offshore wind capacity in the region???, per S&P Global Market Intelligence.
Globally, Wood Mackenzie has revised its forecast for wind power capacity downwards by 29 gigawatts, attributing the reduction to challenges in key markets like the United States and China. However, they also note that the long-term fundamentals for the global wind market remain strong despite these near-term challenges???, per consultancy Wood Mackenzie, as quoted on Reuters.
ETFs in Focus
Against this backdrop, below we highlight a few wind energy ETFs that worth a watch at the current level.
The underlying ISE Clean Edge Global Wind Energy Index provides a benchmark for investors interested in tracking public companies throughout the world that are active in the wind energy industry based on analysis of the products and services offered by those companies.
The top three holdings of the fund are Vestas Wind (9.74%), EDP Renovaveis (8.21%) and Northland Power (6.91%). The fund charges 60 bps in fees.
The underlying Solactive Wind Energy Index provides exposure to companies that are positioned to benefit from further advances in the field of wind energy technology.
The top three holdings of the fund are ORSTED A/S (13.45%), Vestas Wind (12.75%) and Northland Power (10.56%). The fund charges 50 bps in fees.
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After a Tough 2023, Can Wind Energy ETFs Rebound in 2024?
The global outlook for wind stocks in 2024 shows a mixed picture with several challenges and opportunities across different regions. In the United States, the offshore wind industry faces some hurdles, particularly related to the installation of wind turbines due to a century-old law that restricts the use of foreign vessels for such operations. High interest rates and inflation have strained project financing.
This has led to delays and increased costs in projects. Despite these challenges, there is progress with the anticipated completion of a US-built ship for turbine installation and tax incentives under the Inflation Reduction Act.
However, meeting the Biden administration's target of 30 gigawatts of offshore wind capacity by 2030 appears challenging, with projections suggesting the country might achieve only about half of this goal???, per MIT technology review.
In Europe, the outlook is more positive, with significant new offshore wind auctions planned in 2024, totaling approximately 50 gigawatts. This suggests a strong commitment to expanding offshore wind capacity in the region???, per S&P Global Market Intelligence.
Globally, Wood Mackenzie has revised its forecast for wind power capacity downwards by 29 gigawatts, attributing the reduction to challenges in key markets like the United States and China. However, they also note that the long-term fundamentals for the global wind market remain strong despite these near-term challenges???, per consultancy Wood Mackenzie, as quoted on Reuters.
ETFs in Focus
Against this backdrop, below we highlight a few wind energy ETFs that worth a watch at the current level.
First Trust Global Wind Energy ETF (FAN - Free Report)
The underlying ISE Clean Edge Global Wind Energy Index provides a benchmark for investors interested in tracking public companies throughout the world that are active in the wind energy industry based on analysis of the products and services offered by those companies.
The top three holdings of the fund are Vestas Wind (9.74%), EDP Renovaveis (8.21%) and Northland Power (6.91%). The fund charges 60 bps in fees.
Global X Wind Energy ETF (WNDY - Free Report)
The underlying Solactive Wind Energy Index provides exposure to companies that are positioned to benefit from further advances in the field of wind energy technology.
The top three holdings of the fund are ORSTED A/S (13.45%), Vestas Wind (12.75%) and Northland Power (10.56%). The fund charges 50 bps in fees.