By Alps Funds

GREEN LIGHT FOR ACES LAST WEEK

  • As optimism builds for a second round of U.S. fiscal stimulus due to resurgent COVID-19 cases globally, the ALPS Clean Energy ETF (ACES) soared nearly 10% last week with gains from each of its 7 pure-play clean energy segments. ACES was driven higher by double digit gains from its Solar (+17.46%), Fuel Cell (+15.40%), and Biomass/ Biofuel (+12.39%) segments.
  • ACES Solar names were buoyed by positive analyst sentiment, a potential Democratic election sweep, and positive sentiment on China’s preliminary new clean energy goals, which will be finalized in Q1 2021. Four of the 6 ACES Solar names climbed over 15% on the week, led by Sunpower (SPWR, 1.43% weight) rallying over 27%.

ACCORDING TO THE EDISON ELECTRIC INSTITUTE, MORE THAN HALF OF ALL NEW ELECTRICITY GENERATION CAPACITY ADDED OVER THE PAST EIGHT YEARS IN THE U.S. HAS BEEN WIND AND SOLAR.

  • Within the Fuel Cell segment, Ballard Power (BLDP, 3.86% weight*) shot up over 12% last week after it announced it will be expanding manufacturing capacity of its fuel cell components by 6x by early 2021. Plug Power (PLUG, 5.39% weight*), the other ACES Fuel Cell name, was up over 21% last week after analysts upgraded the stock on its growth opportunities within fuel cell powered forklifts and heavy duty trucks.

FULLY INTEGRATED SOLAR PANEL AND BATTERY STORAGE SYSTEM IS HERE

  • At its Battery Day a few weeks ago, Tesla (TSLA, 4.49% weight*) highlighted how fast lithium-ion battery costs are declining for use in Elective Vehicles (EVs). Solar equipment suppliers, such as Enphase Energy (ENPH, 5.87% weight*), and solar equipment installers, such as SunPower and Sunrun (RUN, 6.57% weight*), are benefitting from falling battery storage costs as they all roll out fully integrated solar systems with battery storage.

Weekly ALPS ETF Spotlight 1

  • The levelized cost

For investors seeking momentum, ALPS Clean Energy ETF ACES is probably a suitable pick. The fund just hit a 52-week high and is up 158.9% from its 52-week low price of $23.15/share.

Let’s take a look at the fund and its near-term outlook to gain an insight into where it might be headed:

ACES in Focus

The fund seeks to track the performance of an index comprised of U.S. and Canadian based companies that primarily operate in the Clean Energy sector. Constituents are companies focused on renewables and other clean technologies which enable the evolution of a more sustainable energy sector. It has AUM of $391.3 million and charges an expense ratio of 65 basis points.

Why the Move?

The space has been hitting the headlines these days for several reasons. Increasingly, big corporations are making or promising investments in the pursuit of achieving the most-coveted carbon neutral status. Also, the green energy space has been a hot topic of discussion in the ongoing U.S. election campaign. Democratic presidential candidate Joe Biden has been strongly campaigning for his clean energy and infrastructural plans. He aims to pump $2 trillion into green energy for over four years to build solar panels and charging stations among others. Notably, following the first of the three presidential debates, the wind seems to be flowing in favor of Biden. This is making funds like ACES an attractive investment option.

More Gains Ahead?

It seems like the fund will remain strong, with a positive weighted alpha of 113.91  which gives cues of further rally.

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ALPS Clean Energy ETF (ACES):