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6 Trending Clean Energy ETFs to Watch in January 2025

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Energy ETFs

As we move into 2025, the demand for clean energy is increasing, and investors are eagerly seeking opportunities to diversify their portfolios. One such option that has gained significant attention is Energy ETFs (Exchange-Traded Funds). These funds allow investors to gain exposure to clean energy without the complexity of picking individual stocks. In this article, we will highlight six trending clean energy ETFs to watch in January 2025 and explore how they are revolutionising the energy sector.

1. iShares Global Clean Energy ETF (ICLN)

The iShares Global Clean Energy ETF (ICLN) remains one of the top choices for clean energy investments. It focuses on companies that produce energy from renewable sources like wind, solar, and other alternative energy forms. With global climate initiatives and government incentives pushing clean energy investments forward, ICLN is well-positioned to capitalise on these trends. It offers exposure to a diverse group of energy companies worldwide, making it an attractive choice for both short-term and long-term investors.

With a growing commitment to decarbonisation, this ETF provides a strong platform for investors interested in contributing to a cleaner, more sustainable future. As we move into 2025, this ETF’s consistent performance, alongside its low expense ratio, continues to make it a favourite in the clean energy space.

2. First Trust Global Wind Energy ETF (FAN)

Wind energy is another major component of the clean energy landscape, and the First Trust Global Wind Energy ETF (FAN) focuses specifically on companies involved in the development and operation of wind energy projects. As wind energy grows in popularity and technological advancements make it more cost-effective, this ETF presents an excellent investment opportunity.

FAN holds a portfolio of leading global companies involved in wind turbine manufacturing, infrastructure development, and energy generation. As governments around the world set aggressive renewable energy targets, FAN is poised to benefit from this strong tailwind. For investors looking for a clean energy ETF that focuses on wind power, FAN stands out as one of the best choices in January 2025.

3. Invesco Solar ETF (TAN)

As the world shifts towards renewable energy, solar power continues to play a pivotal role in the energy transition. The Invesco Solar ETF (TAN) provides investors with exposure to the solar industry, which includes solar panel manufacturers, solar energy providers, and infrastructure developers. With solar technology becoming increasingly efficient and cost-effective, TAN is an attractive option for investors looking to capitalise on solar energy’s exponential growth.

The rising global demand for solar energy, supported by favourable government policies and initiatives, positions TAN as a key player in the clean energy ETF market. As we look towards January 2025, the Invesco Solar ETF continues to demonstrate strong growth potential, making it a valuable addition to any clean energy-focused portfolio.

4. SPYG Clean Energy ETF (SPYG)

The SPYG Clean Energy ETF (SPYG) is a relatively new but rapidly growing fund that focuses on investing in companies focused on sustainable energy solutions. With an emphasis on energy storage, hydrogen power, and innovative green technologies, SPYG is designed for investors who want to be at the forefront of clean energy advancements.

Energy storage, in particular, is a sector expected to see explosive growth in the coming years as governments and businesses look to store excess energy generated by renewable sources. SPYG holds positions in companies involved in these developments, which makes it an ideal ETF for those looking to gain exposure to cutting-edge clean energy technologies.

5. Global X CleanTech ETF (CTEC)

The Global X CleanTech ETF (CTEC) offers exposure to the broader clean technology sector, which includes companies involved in renewable energy, electric vehicles, energy storage, and energy efficiency technologies. CleanTech has gained considerable traction as global efforts intensify to combat climate change, and CTEC has emerged as one of the leading ETFs in this category.

CTEC’s portfolio consists of companies that are driving the adoption of sustainable technologies, making it a solid choice for investors seeking a diversified approach to the clean energy sector. With the continued growth of electric vehicles, solar power, and other green technologies, CTEC is well-positioned to deliver solid returns in January 2025.

6. VanEck Vectors Low Carbon Energy ETF (SMOG)

The VanEck Vectors Low Carbon Energy ETF (SMOG) focuses on companies that are actively reducing their carbon emissions and promoting low-carbon energy solutions. This ETF includes companies involved in various aspects of the clean energy industry, including renewable energy production, carbon capture technologies, and other initiatives aimed at reducing global carbon footprints.

SMOG’s diversified approach allows investors to gain exposure to a broad array of companies in the low-carbon sector, including leaders in wind, solar, and energy storage technologies. With increasing awareness of climate change and the push for decarbonisation, SMOG is a trending ETF to watch in January 2025.

The Role of Grey Market in Energy ETFs

When discussing energy ETFs, it is essential to understand the influence of the grey market. A grey market refers to the buying and selling of securities outside of the traditional exchange framework, often before they are officially listed or launched. In the context of clean energy ETFs, the grey market plays a role in providing early access to stocks or ETFs before they are made publicly available for trading.

For example, when a new clean energy ETF is launched, early investors might engage in grey market activities to trade shares of the ETF at a premium or discount based on expected demand. This market can be a valuable tool for investors who are keeping a close eye on the emerging trends in energy ETFs and want to capitalise on early movements.

In clean energy, where market dynamics can shift rapidly due to regulatory changes or technological advancements, the grey market can offer opportunities for savvy investors to enter new ETFs before they officially hit the market.

Conclusion

In conclusion, 2025 is shaping up to be a significant year for clean energy investments, with energy ETFs offering an accessible way for investors to tap into the growing demand for renewable energy. The six ETFs highlighted—ICLN, FAN, TAN, SPYG, CTEC, and SMOG—represent diverse opportunities across the clean energy sector. By investing in these trending energy ETFs, investors can position themselves for long-term growth as the world transitions to more sustainable energy sources. The involvement of the grey market further amplifies the potential for early movers in this space to benefit from emerging trends.

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