Global X Expands Clean Energy ETF Suite With Launches

·4-min read

Global X ETFs, a member of Mirae Asset Financial Group, broadened its alternative energy offerings with the launch of Global X Solar ETF RAYS and Global X Wind Energy ETF WNDY. Alternative energy includes any energy source that acts as a replacement to conventional and non-renewable fossil fuel. The space is expected to get stronger under President Joe Biden’s administration.

Biden is expected to talk about climate emergencies on global platforms and ensure that the United States will achieve a 100% clean energy economy and net-zero emissions, at least by 2050. Moreover, he pledged to reduce the U.S. greenhouse gas emissions to half by 2030 as stated in a Yahoo Finance article.

RAYS in a Nutshell

The Global X Solar ETF seeks an investment in companies positioned to benefit from the advancement of the global solar technology industry. This includes companies involved in solar power production; the integration of solar into energy systems; and the development/manufacturing of solar-powered generators, engines, batteries, and other technologies related to the utilization of solar as an energy source. It aims to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of the Solactive Solar Index.

The fund charges 0.50% as the total expense ratio and gathered an AUM of $2.4 million.

WNDY at a Glance

The Global X Wind Energy ETF looks to invest in companies positioned to benefit from the advancement of the global wind energy industry. This includes companies involved in wind-energy technology production; the integration of wind into energy systems and the development/manufacturing of turbines that harness energy from wind and convert it into electrical power. It intends to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of the Solactive Wind Energy Index.

The fund charges 0.50% as the total expense ratio and amassed an AUM of $2.4 million.

What Makes RAYS & WNDY Attractive Picks?

The alternative energy space has been in the spotlight of late for many reasons. Increasingly, large corporations are making or promising investments to gain the carbon-neutral status. Favorable government initiatives and federal policies, which include tax incentives to encourage installation, accelerated global market growth for the clean energy space. Moreover, despite turbulences arising from the coronavirus pandemic, both solar and wind energies have been dominating the global renewable space of late.

The global solar energy market is expected to be worth around $200 billion by 2026, quadruple the market size achieved in 2019. Moreover, the Biden regime plans to widen the solar’s size in the United States energy mix from 4% at present to 50% by 2050, per an ETF.com article. Going forward, the wind energy market is projected to value at about $127 billion by 2027, double the market size in 2019.

According to the International Energy Agency (IEA), renewable energy sources are expected to make up 30% of the world’s electricity by 2024 in comparison to the current 26%. Per Allied Market Research, the global renewable energy market is expected to reach a value of $1.51 billion, seeing a CAGR of 6.1% between 2018 and 2025.

ETF Competition

The fund faces a direct tough competition due to its focus on clean energy resources. Below we discuss a few ETFs that expect to benefit from the said space:

Consider the following interesting options:

Invesco Solar ETF TAN

The fund is based on the MAC Global Solar Energy Index. TAN will invest at least 90% of its total assets in the securities, American depositary receipts (ADRs) and global depositary receipts (GDRs) that comprise the index. The index comprises companies in the solar energy industry. The fund has an AUM of $3.15 billion and charges an expense ratio of 69 basis points (read: ESG Investing Is Hot: Bunch of New ETFs Hit Market in August).

First Trust Global Wind Energy ETF FAN

FAN seeks investment results that correspond generally to the price and yield performance, before the fund's fees and expenses, of an equity index called the ISE Clean Edge Global Wind Energy Index. The fund has an AUM of $405 million and charges an expense ratio of 60 basis points (read: A Complete Guide to Clean Energy ETFs).


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Invesco Solar ETF (TAN): ETF Research Reports
 
First Trust Global Wind Energy ETF (FAN): ETF Research Reports
 
Global X Solar ETF (RAYS): ETF Research Reports
 
Global X Wind Energy ETF (WNDY): ETF Research Reports
 
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