Shining a Light on 5 Clean Energy ETFs as We Step Into Q4
September 30, 2025
We are all set to step into the final quarter of 2025 tomorrow, and the clean energy industry remains in the spotlight, rallying impressively throughout the year. This momentum is backed by record global investment, which hit a record $386 billion (up 10% year over year as reported by BloombergNEF) in the first half of 2025 alone, amid relentless demand from new electricity loads like data centers and cleantech manufacturing.
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The S&P Global Clean Energy Select Index reflects this strength, having posted a solid 37.4% return year to date, driving clean energy ETFs like the Invesco WilderHill Clean Energy ETF (PBW) and the iShares Global Clean Energy ETF (ICLN) to soar noticeably, as well.
The global clean energy industry has been rallying high lately, driven by a confluence of powerful factors. Key tailwinds include favorable government policies worldwide, the declining cost of renewable technologies, increasing corporate investments, and rapid technological innovation that lowers installation costs and improves efficiency. In addition, soaring power demand from the exponential growth of power-hungry data centers and the rapid electrification of the transportation sector certainly remained the two major growth drivers for the industry.
Consequently, the overall outlook for this industry remains highly optimistic in Q4. However, no one can deny the fact that the significant domestic headwinds faced by the U.S. clean energy market remain a challenge for this industry. Recent U.S. administrative policy changes — such as the rollback of certain tax credits under the “One Big Beautiful Bill Act (OBBBA)” and import tariff uncertainty — have created a volatile policy landscape. This uncertainty resulted in a 36% drop in U.S. renewable energy investment in the first half of 2025 compared to the second half of 2024, a softness that may continue into Q4.
Despite the U.S. slowdown, the global clean energy boom continues, with other nations driving growth. Notably, the European Union saw a 63% jump in investment in the first half of 2025, backed by government support and a push for energy independence. On the other hand, China remains the largest market, accounting for 44% of global new investment. In addition, smaller markets in regions like Southeast Asia and Latin America gained their largest share of regional investment to date. This broad global commitment suggests that the global clean energy industry’s overall growth trajectory will remain robust as we enter the October-December quarter.
iShares Global Clean Energy ETF (ICLN)
This fund is the largest clean energy ETF, providing exposure to leading companies in solar, wind, and other renewable sectors worldwide. Sector-wise, renewable electricity constitutes 20.41% of this fund. Its top three holdings are in solar PV module manufacturer First Solar (9.56%), fuel cell generating company-Bloom Energy (5.97%) and wind turbine manufacturer Vestas Wind Systems (5.88%).
ICLN has surged 35.4% year to date. The fund charges 39 basis points (bps) as fees.
First Trust Nasdaq Clean Edge Green Energy ETF (QCLN)
This fund focuses on U.S.-listed companies involved in renewable electricity generation, energy storage, electric vehicles, and those involved in emerging clean energy technologies. Sector-wise, renewable energy equipment constitutes 20.31% and alternative electricity comprises 10.23% of this fund. Its top three holdings include electric vehicle manufacturers Tesla Inc. (9.59%) and Rivian Automotive (7.94%) as well as First Solar (8.20%).
QCLN has soared 24.1% year to date. The fund charges 56 bps as fees.
ALPS Clean Energy ETF (ACES)
This fund offers exposure to U.S. and Canadian companies involved in the clean energy sector, including renewables and clean technology. Sector-wise, solar forms 26.81%, electric vehicles constitute 22.45%, energy management and storage comprise 15.86%, wind holds 12.22% and Hydro/Geothermal comprises 9.49% of this fund. Its top three holdings include Tesla (5.70%), clean-energy specialized investment firm HA Sustainable Infrastructure (4.95%) as well as First Solar (4.92%).
ACES has surged 24.2% year to date. The fund charges 55 bps as fees.
Invesco WilderHill Clean Energy ETF (PBW)
This fund offers exposure to a broad range of U.S.-listed clean energy companies. Sector-wise, energy constitutes 3.78% and utilities comprise 3.78% of this fund. Its top three holdings include Bloom Energy (3.39%), battery manufacturer Ampirus Technologies (3.01%) and solar energy system provider Sunrun (2.99%).
PBW has surged 44.7% year to date. The fund charges 65 bps as fees.
Fidelity Clean Energy ETF (FRNW)
This fund offers exposure to companies that distribute, produce or provide technology or equipment to support the production of energy from solar, wind, hydrogen and other renewable sources. Industry-wise, Independent Power & Renewable Electricity Producers constitutes 22.54% and electric utilities comprise 8.09% of this fund. Its top three holdings include Bloom Energy (5.39%), renewable energy equipment manufacturer GE Vernova (4.82%) and First Solar (4.35%).
FRNW has soared 42.9% year to date. The fund charges 40 bps as fees.
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Invesco WilderHill Clean Energy ETF (PBW): ETF Research Reports
iShares Global Clean Energy ETF (ICLN): ETF Research Reports
First Trust NASDAQ Clean Edge Green Energy ETF (QCLN): ETF Research Reports
ALPS Clean Energy ETF (ACES): ETF Research Reports
Fidelity Clean Energy ETF (FRNW): ETF Research Reports
This article originally published on Zacks Investment Research (zacks.com).
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