6 Best-Performing Clean Energy ETFs for February 2024

Want to invest in wind or solar energy? Clean energy ETFs make it easy.
Alana Benson
By Alana Benson 
Updated
Edited by Arielle O'Shea Reviewed by Jody D’Agostini

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The clean energy boom is new, and there’s no way to know what companies will be the belles of the ball. But rather than try to predict which specific companies will prosper, you can invest in clean energy ETFs and gain wider exposure to the industry as a whole.

What are clean energy ETFs?

Clean energy ETFs are exchange-traded funds that invest in stocks in the alternative energy sector, which might include solar energy, wind, hydroelectric and geothermal companies. Like other types of funds, clean energy ETFs can easily diversify your portfolio. ETFs also tend to be less expensive than mutual funds.

Best-performing clean energy ETFs

Below is a list of the best-performing clean energy ETFs.

» Excited about clean energy ETFs? Here are the best online brokers for ETF investing

Ticker

Fund name

5-year return

CNRG

SPDR S&P Kensho Clean Power ETF

15.95%

TAN

Invesco Solar ETF

14.57%

QCLN

First Trust NASDAQ Clean Edge Green Energy Index Fund

13.68%

NZAC

SPDR MSCI ACWI Climate Paris Aligned ETF

10.85%

SMOG

VanEck Low Carbon Energy ETF

10.72%

ICLN

iShares Global Clean Energy ETF

9.60%

Source: VettaFi. Data is current as of market close on January 31, 2024 and is for informational purposes only.

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Clean energy ETFs in detail

When investigating clean energy ETFs, keep in mind that expense ratios should be weighed against the fund's overall return net of fees. If multiple years of returns can justify the fee, a larger fee may be less impactful than it seems.

Need a little more information? Here are three of the biggest clean energy ETFs.

Invesco Solar ETF (TAN)

The Invesco Solar ETF has a total expense ratio of 0.69% and a majority allocation of solar energy holdings. Because this fund specializes in one form of alternative energy, it may not be as diversified as other funds that invest in various types of energy. At the time of this writing, TAN’s top three holdings include First Solar Inc., Enphase Energy and SolarEdge Technologies Inc.

» How are sustainable funds measured? Learn more about ESG

iShares Global Clean Energy ETF (ICLN)

With nearly $5 billion in assets, this ETF is the largest fund. ICLN has an expense ratio of 0.40%, and the fund earns a high “AA” MSCI ESG score, which measures the fund against environmental, social and corporate governance factors. Currently, ICLN’s top three holdings include First Solar Inc., Enphase Energy Inc. and Iberdrola SA.

Invesco WilderHill Clean Energy ETF (PBW)

Invesco WilderHill Clean Energy ETF tracks the WilderHill Clean Energy Index and is made up of stocks involved in clean energy and conservation. PBW has an expense ratio of 0.62%. Currently, its top three holdings include NaaS Technology Inc. ADR, EVgo Inc. and ReNew Energy Global PLC.

» View our list: The best EV stocks

Invest in what matters
Support the social and environmental initiatives you believe in, all while building your portfolio.

Why invest in clean energy ETFs

Between the new White House green initiatives and a large number of automakers committing to making electric vehicles, the long-awaited “green revolution” may have arrived.

Clean energy ETFs offer access to energy companies without having to pick and choose stocks yourself. If you want, you can find clean energy ETFs that specialize in solar or wind, or just opt to invest more broadly across the alternative energy industry.

And while many of these ETFs have five years' worth of data, renewable energy is still a relatively new field. Rather than purchasing single stocks in this field ETFs spread out your risk and help diversify your portfolio. That way, you're not relying on a single company.

» Want more options? Check out the top-rated ESG funds

Learn more

Frequently asked questions

The largest clean energy ETF is the iShares Global Clean Energy ETF (ICLN). At the time of this writing the fund had nearly $6 billion in assets under management

The best alternative energy stock is the one that makes the most sense for your portfolio. To see a list to draw inspiration from, check out the best-performing renewable energy stocks.

This depends on several factors: Are you already invested in specific forms of green energy? What does your existing portfolio look like? How much risk are you willing to take with your investments?

When you can answer these questions, you can start to explore the various industries within the green energy sector, such as wind, solar, hydroelectric and geothermal investments.

» Need some help? Learn more about diversification

Data is intended for informational purposes only.

Neither the author nor editor held positions in the aforementioned investments at the time of publication.
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