Understanding the ALPS CLEAN ENERGY ETF (ACES)

The ALPS CLEAN ENERGY ETF (ticker: ACES) is an exchange-traded fund designed to provide exposure to the clean energy sector. This ETF focuses on companies involved in renewable energy and related technologies.

What this ETF is trying to do

ACES seeks to track the performance of companies working in the clean energy space. Based on its top holdings, the fund invests in various sectors such as electric vehicles, solar energy, and sustainable infrastructure.

Top Holdings

The following is a partial list of the fund's largest holdings (holdings can change over time):

• Northland Power Inc (5.55%)

• Tesla Inc (5.28%)

• NextPower Inc (5.13%)

• Clearway Energy Inc Class C (5.01%)

• Itron Inc (5.00%)

• Rivian Automotive Inc Class A (4.94%)

• Brookfield Renewable Partners LP (4.90%)

• Darling Ingredients Inc (4.88%)

• First Solar Inc (4.84%)

• Ormat Technologies Inc (4.81%)

What the numbers show

When looking at how this ETF has performed, it is important to distinguish between price return (the change in the share price) and total return (which includes distributions).

• Year-to-Date (YTD): The price return is -15.24%, while the total return is -14.98%.

• One-Year: The price return was -21.28%, and the total return was -20.82%.

• Three-Year: The price return was -16.70%, and the total return was -14.52%.

• Five-Year: The five-year total return was -56.26%.

An estimated price from roughly one year ago was $34.91. The current price is $27.48.

Income and distribution explanation

This ETF provides some cash income through distributions. The current distribution yield is approximately 0.68%. These payments usually happen quarterly, with four payments recorded over the last 12 months. While these distributions provide cash, they are relatively low compared to the fund's overall price movement.

NAV erosion explanation

The term "NAV erosion" refers to a decline in the Net Asset Value (the actual value of the fund's underlying assets). The supplied data is sufficient to evaluate price erosion, but it does not include enough historical NAV-per-share data to confirm or rule out NAV erosion.

The fund has an erosion-risk score of 55, which is labeled as "Moderate price erosion." This means the market price of the shares has shown a downward trend.

Pros

• Provides diversified exposure to many different clean energy companies in one fund.

• Includes well-known names in the electric vehicle and solar industries.

Cons

• The fund has experienced significant share-price declines over the one-year, three-year, and five-year periods.

• The distribution yield is quite low.

Beginner takeaway

Investors researching ACES should note that while the fund offers access to the clean energy sector, it has faced recent price declines. When looking at this ETF, remember that a distribution yield tells you about cash payments, but it does not guarantee that the share price will stay stable.