ICLN has slightly scored over PBD in the 3-year shootout, but has massively lagged behind QCLN and PBW.Īn investment in funds like ICLN makes sense only for long-term growth investors, and data suggest that ICLN is a peer underperformer.ICLN has heavily underperformed all its peers in the 10-year and 5-year holding shootouts (see the image above).Image Source: Custom Comparison at Seeking AlphaĪ comparison of ICLN’s price momentum with that of its peers like First Trust NASDAQ Clean Edge Green Energy Index ETF ( QCLN), Invesco WilderHill Clean Energy Portfolio ETF ( PBW), and Invesco Global Clean Energy Portfolio ETF ( PBD) reveals that: However, I believe that any such adverse reaction will be temporary because climate change is upon us and we will be moving to renewable sources of power as soon as we can. Its portfolio’s P/E ratio is 26.22 and P/BV ratio is 3.04 – these are high ratios, but then the market is in a strong bull grip and most growth investors are chasing stocks all the way to the moon.Ībout 48% of ICLN’s total assets are invested in its top 10 holdings, which makes it a top-heavy fund that is vulnerable to headwinds – for example, if the climate change budget proposed by President Biden runs into rough weather, the entire sector can be adversely affected. The ETF has currently invested its total assets in 83 stocks.

Like I said, it’s a nothing yield, but can be perceived as an edible cake decoration. This payout earns it a forward dividend yield of 0.67% based on its market price of $22.25 as of September 24, 2021. In 2020, the ETF paid $0.10 as dividend, and given the gains in renewable power stocks, I believe it will end up paying about $0.15 as dividend in 2021. ICLN is a growth ETF and its dividend yield can at best be deployed to buy a few rounds of beers. These developments augur well for the renewable power industry and the sector is staring at good times ahead. The research firm believes that lower coal demand coupled with a history of poor profitability, declining cash flows, and growing ESG concerns will create conditions leading to mine closures and bankruptcies in the future. and that the coal demand will go down lower than its forecast. Moody's has forecast that coal production would fall by about 20% in the U.S. This is a healthy growth rate, which is expected to get increasingly better because I believe that the climate catastrophes happening in 2021 will motivate governments to shift towards clean energy sooner than later. That implies year-over-year growth of 15% in 2021 and about 13% in 2022. The EIA has forecasted that electricity generation from renewable sources (non-hydroelectric) will jump from 501.39 billion kWh in 2020 to 578.71 billion kWh in 2021 and 651 billion kWh in 2022. Image Source: Energy Information Administration (EIA) ICLN has been consolidating in a narrow band of $22–25 from March 2021 to September 2021, and it is, therefore, time to review its prospects. For those who are new to the ETF, ICLN invests in companies that produce energy from renewable sources (solar, wind, etc.), and the fund has a middling expense of 0.42%. The ETF soon jumped to a high of $33, but later corrected and is now priced at about $22 – almost back at my earlier recommended price. Here is a list of our partners.I had assigned a bullish rating to the iShares S&P Global Clean Energy Index ETF ( NASDAQ: ICLN) in November 2020 when it was quoting about $20. Our partners cannot pay us to guarantee favorable reviews of their products or services. This may influence which products we review and write about (and where those products appear on the site), but it in no way affects our recommendations or advice, which are grounded in thousands of hours of research. So how do we make money? Our partners compensate us. And while our site doesn’t feature every company or financial product available on the market, we’re proud that the guidance we offer, the information we provide and the tools we create are objective, independent, straightforward - and free.

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