The war in Ukraine will have a profound impact on the oil and gas markets and could accelerate the world’s transition to clean energy.
Europe is heavily dependent on Russia for oil and gas as it had drastically reduced investments in fossil fuels in the past few years and decided to phase out nuclear power. They now plan to accelerate the expansion of renewable energy.
Investors have poured a lot of money into clean energy stocks and ETFs that are outperforming the broader indexes since the war started.
These ETFs had delivered spectacular performance in 2019 and 2020 but struggled last year as President Biden’s ambitious Build Back Better agenda faltered and investors pivoted out of growth stocks to value stocks.
The cost of renewable energy generation has been falling in recent years with continued technological innovation, and that has started changing the competitive balance between clean and traditional energy. These ETFs could see further interest from investors if crude prices stay elevated.
The iShares Global Clean Energy ETF (
ICLN
), the Invesco WilderHill Clean Energy ETF (
PBW
) and the SPDR S&P Kensho Clean Power ETF (
CNRG
) invest in companies involved in clean energy generation, advancement & conservation. Enphase Energy (
ENPH
), Bloom Energy (
BE
) and Tesla (
TSLA
) are among the top holdings in these ETFs.
To learn more about these ETFs, please watch the short video above.
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