5 ESGs and Green Tech ETFs you can consider :
5 ESGs and Green Tech ETFs you can consider
Investing is probably the most sustainable way to create wealth. Opportunities to invest abound in every sector. However, before investing in any sector, it is important to have a good understanding and insight into that sector.
What is an ESG and green tech ETF?
ETF stands for Exchange Traded Funds. They are fund types that contain investments like stocks or bonds. They are considered low-risk investments and helps investors to diversify their portfolio. Green tech ETFs are a basket of investments in the green energy sector. Investors in green ETFs are exposed to companies that produce energy from solar, wind, water, and other renewable energy sources.
Environmental, Social, and Governance (ESG) have become increasingly popular in recent years. Incorporating the values of ESG into investments provides the platform for green enthusiasts, corporations, and governments to be environmentally responsible with investments.
5 ESG and Green Tech ETFs to consider
The Global green tech and sustainability market is expected to grow from $13.76 billion in 2022 to $51.09 billion by 2029, at a compound annual growth rate (CAGR) of 20.6%. These figures point out the potential growth of the clean energy sector. With countries looking to transition to clean energy, ESG ETFs could be a viable option for potential investors.
Five ESG ETFs that prospective investors can look out for are:
The iShares Global Clean Energy Fund (ICLN)
The ICLN is probably the most popular ESG ETF for now. Its focus on global companies that produce energy from solar, wind, and other renewable energy sources ranks it high on the ESG factors. The ETF invests in companies that manufacture and operate a wide array of clean energy sources. It does this by tracking top green firms on the S&P Global Energy Index.
The Invesco Wilderhill Clean Energy ETF (PBW)
This ETF lets investors buy into companies focused on clean energy and conservation. It concentrates on smaller clean energy firms using an equal-weight strategy. This means that it invests similar amounts across its clean energy companies so investors can have a broader approach to clean energy.
First Trust Nasdaq Clean Edge Green Energy ETF (QCLN)
QCLN ETF tracks companies on the NASDAQ Clean Energy Index. Its focus is on manufacturers, distributors, developers, and/or installers of clean-energy technologies. One of its best features is its broad portfolio, which focuses on companies in multiple sectors of green energy. This offers investors more diversified exposure to the green tech sector.
Global X CleanTech ETF (CTEC)
Green X CleanTech ETF invests in companies that benefit from the increased adoption of clean energy technologies. Companies involved in renewable energy production and storage, residential/commercial energy efficiency, and reduction of pollution products are the focus of this ETF. It follows the Global CleanTech Index.
The Invesco Solar ETF (TAN)
The ETF focuses on companies in the solar industry. This includes companies that supply the raw materials for production, manufacture electrical components, and install panels. Investors can invest in a range of solar energy stocks. It also offers geographical diversification. That is, not all the fund’s holdings are from what country. The ETF tracks the MAC Global Solar Energy Index.
Conclusion
A combination of ESG values and ETFs focuses on companies that promote or are directly involved in environmentally conscious business practices. ESG ETFs could invest in a broad range of green activities. It is up to interested investors to determine if an ETF fits their environmental sustainability criteria.
