ALPS Clean Energy ETF (ACES)

ALPS Clean Energy ETF (ACES) Financial Services Profile

The ALPS Clean Energy ETF (ACES) provides investors with targeted exposure to the North American clean energy sector, aiming to replicate the performance of the CIBC Atlas Clean Energy Index. This exchange-traded fund concentrates on companies engaged in renewable energy and clean technology, positioning it as a vehicle for thematic investment within the evolving energy landscape.

What Is the Investment Thesis for ACES?

The investment thesis for the ALPS Clean Energy ETF (ACES) centers on its role as a focused vehicle for exposure to the burgeoning North American clean energy sector. The fund's objective to track the CIBC Atlas Clean Energy Index positions it to benefit from several macro-level growth catalysts. Foremost among these is the accelerating global energy transition, driven by climate change concerns and technological advancements, which is leading to substantial long-term investment in renewable energy and clean technology infrastructure. Furthermore, ongoing government support and policy incentives in North America, such as tax credits and subsidies for renewable projects, are expected to continue stimulating growth within the sector. However, investors must consider the fund's inherent risks. ACES maintains a concentrated portfolio within a specific sector, making it susceptible to sector-specific downturns, regulatory shifts, and technological obsolescence. Its Beta of 1.90 indicates significantly higher volatility compared to the broader market, suggesting that while potential returns could be higher, so too is the risk of capital loss. Potential tracking error between the ETF and its underlying index is another factor to monitor. Despite these risks, the fund offers a liquid and transparent mechanism for investors seeking direct, passive exposure to companies poised to benefit from the secular growth trends in clean energy, provided they are comfortable with the associated sector concentration and market volatility.

Based on FMP financials and quantitative analysis

ACES Key Highlights

• Market Capitalization: $0.12 billion, indicating its current size within the ETF market.
• Beta: 1.90, suggesting significantly higher volatility compared to the broader market benchmark.
• Dividend Yield: None, as the fund does not distribute dividends.
• Investment Focus: Provides concentrated exposure to North American companies within the clean energy and renewable technology sectors.
• Objective: Seeks to correspond to the performance of the CIBC Atlas Clean Energy Index before fees and expenses.

Who Are ACES's Competitors?

ACES is benchmarked below against 8 industry peers on price, market cap, and our AI MoonshotScore.

AI Score by Stock Expert AI · Price data: FMP / Yahoo Finance

What Are ACES's Key Strengths?

• Offers concentrated exposure to the growing North American clean energy sector.
• Benefits from the efficiency and transparency of passive management.
• Underlying sector is supported by increasing government investment and policy initiatives.
• Provides a liquid and accessible investment vehicle for thematic investing.

What Are ACES's Weaknesses?

• High concentration in a single sector makes it susceptible to sector-specific downturns.
• Potential for tracking error between the ETF's performance and its underlying index.
• Sensitivity to changes in regulatory frameworks and government subsidies.
• Beta of 1.90 indicates significantly higher volatility compared to the broader market.

What Could Drive ACES Stock Higher?

• Continued government investment and policy support for renewable energy infrastructure across North America.
• Accelerating technological innovation in areas like battery storage, green hydrogen, and grid modernization, improving cost-effectiveness and adoption.
• Increasing corporate adoption of clean energy solutions and commitments to net-zero emissions, driving demand for underlying holdings.
• Potential new legislative initiatives or expansions of existing programs in the U.S. and Canada further incentivizing clean energy development and deployment.

What Are the Key Risks for ACES?

• High concentration in the North American clean energy sector, leading to susceptibility to sector-specific downturns and market corrections.
• Sensitivity to changes in government subsidies, tax credits, and regulatory frameworks impacting the economic viability of renewable energy projects.
• Significant tracking error relative to the CIBC Atlas Clean Energy Index, resulting in the ETF's performance diverging from its intended benchmark.
• Intense competition within the ETF market for clean energy exposure, potentially impacting asset gathering and fee pressure.
• Volatility inherent in emerging technology sectors and growth-oriented companies, as reflected by the fund's Beta of 1.90.

What Are the Growth Opportunities for ACES?

• Global Energy Transition Acceleration: The worldwide imperative to combat climate change continues to drive a monumental shift towards renewable energy sources and clean technologies. This transition is not merely an environmental initiative but a fundamental economic reorientation, with trillions of dollars projected to be invested globally in new energy infrastructure over the coming decades. ACES, by tracking North American clean energy companies, is positioned to benefit from this overarching trend, as these firms develop and deploy the technologies and services critical for decarbonization. The market for renewable energy, including solar, wind, and hydropower, is expected to grow significantly, with projections indicating a substantial increase in installed capacity and associated services through 2030 and beyond. This sustained demand provides a long-term tailwind for the fund's underlying holdings.
• Robust Government Policy and Incentives: Governments across North America, particularly in the United States and Canada, are implementing and expanding policies designed to accelerate clean energy adoption and development. Initiatives such as the U.S. Inflation Reduction Act (IRA) provide substantial tax credits, grants, and loan guarantees for renewable energy projects, electric vehicles, and energy efficiency improvements. These policies create a favorable operating environment for the companies ACES tracks, reducing project costs, enhancing profitability, and stimulating investment. Such legislative support, often with multi-year timelines extending through the late 2020s and early 2030s, de-risks investments in the sector and expands the addressable market for clean energy solutions, directly benefiting the fund's constituents.
• Continuous Technological Innovation: Rapid advancements in clean energy technologies are consistently improving efficiency, reducing costs, and expanding the capabilities of renewable solutions. Breakthroughs in battery storage, grid modernization, green hydrogen production, and advanced solar panel designs are making clean energy more competitive and accessible. For instance, the declining cost curves of solar photovoltaics and wind turbines have made them economically viable alternatives to fossil fuels in many regions. These innovations open new market segments and enhance the profitability of existing clean energy businesses. Companies within the ACES portfolio are likely to be at the forefront of these developments, leveraging new technologies to drive growth and expand their market share over the next 5-10 years.
• Increasing Corporate ESG Commitments: A growing number of corporations globally are setting ambitious environmental, social, and governance (ESG) targets, including commitments to achieve net-zero emissions and power their operations with 100% renewable energy. This trend is driving significant corporate demand for clean energy solutions, from direct procurement of renewable power to investments in sustainable supply chains and energy-efficient infrastructure. Companies tracked by ACES are direct beneficiaries of this corporate shift, providing the products, services, and expertise needed to meet these sustainability goals. This corporate-driven demand represents a substantial and expanding market segment, offering a consistent revenue stream and growth opportunities for the clean energy sector throughout the current decade and beyond.
• Rising Investor Demand for Thematic ETFs: Thematic investing, particularly in sectors aligned with sustainability and future growth trends like clean energy, has seen a significant surge in popularity among both institutional and retail investors. As awareness of climate change and the potential for disruptive technologies grows, investors are increasingly allocating capital to funds like ACES that offer focused exposure to these themes. This growing demand translates into increased assets under management (AUM) for clean energy ETFs, potentially leading to greater liquidity and market visibility. The trend towards thematic and ESG-aligned investing is expected to continue its upward trajectory, supporting the growth of specialized funds like ACES as a preferred vehicle for accessing the clean energy market over the long term.

What Opportunities Does ACES Have?

• Continued acceleration of the global energy transition towards renewables.
• Ongoing technological advancements in clean energy reducing costs and expanding applications.
• Increasing corporate demand for clean energy solutions to meet ESG targets.
• Growing investor appetite for thematic and ESG-aligned exchange-traded funds.

What Threats Does ACES Face?

• Sector-specific downturns or economic recessions disproportionately impacting clean energy firms.
• Adverse changes in government policies or withdrawal of subsidies for renewable energy.
• Intense competition from other clean energy ETFs and broader ESG funds.
• Technological obsolescence or failure of specific clean energy solutions.

What Are ACES's Competitive Advantages?

• Specialized index tracking methodology (CIBC Atlas Clean Energy Index) providing unique sector exposure.
• Established brand recognition of ALPS within the broader ETF market.
• Liquidity and ease of trading on major stock exchanges, enhancing accessibility for investors.
• Cost-efficiency of passive management, typically lower than actively managed funds in the same space.

What Does ACES Do?

The ALPS Clean Energy ETF (ACES) functions as an exchange-traded fund designed to offer investors targeted exposure to the dynamic North American clean energy sector. Its core objective is to achieve investment results that correspond, before fees and expenses, generally to the performance of its underlying benchmark, the CIBC Atlas Clean Energy Index (NACEX). This index is meticulously constructed to track companies primarily engaged in the clean energy industry across North America, encompassing a broad spectrum of activities related to renewable energy and clean technology. ACES positions itself as a concentrated investment vehicle for those seeking to capitalize on the ongoing global energy transition. The fund's strategy is inherently passive, meaning it does not attempt to outperform its index but rather to replicate its composition and performance. This approach provides investors with a transparent and cost-efficient way to access a basket of companies at the forefront of renewable power generation, energy efficiency, sustainable transportation, and other clean technology innovations. The underlying index identifies and selects firms involved in solar power, wind power, hydroelectricity, geothermal energy, biofuels, electric vehicles, energy storage solutions, smart grid technologies, and other related clean energy infrastructure. By focusing on North American entities, ACES offers a specific geographical lens for investors interested in the regional developments and policy impacts within the clean energy space. The increasing governmental support and private sector investment in clean energy initiatives across the United States and Canada serve as a significant backdrop for the companies comprising the fund's holdings, potentially driving long-term growth within the sector it tracks. As an ETF, ACES provides daily liquidity and transparency, allowing investors to buy and sell shares throughout the trading day, similar to individual stocks. Its structure is particularly appealing to institutional investors, financial advisors, and retail investors who seek a convenient and diversified (within its thematic focus) method to participate in the growth trajectory of the clean energy economy.

What Products and Services Does ACES Offer?

• Tracks the performance of the CIBC Atlas Clean Energy Index (NACEX).
• Invests in a portfolio of North American companies engaged in the clean energy sector.
• Provides exposure to various renewable energy technologies, including solar, wind, and hydro.
• Includes firms involved in clean technology innovations such as energy storage and smart grids.
• Operates as an exchange-traded fund (ETF), offering daily liquidity.
• Aims to correspond to the underlying index's performance before accounting for fees and expenses.
• Offers a concentrated investment vehicle for thematic exposure to clean energy.
• Facilitates passive investment in a basket of clean energy stocks.

How Does ACES Make Money?

• Generates revenue through management fees (expense ratio) charged to investors for managing the fund.
• Passively manages its portfolio of securities to replicate the performance of its underlying index.
• Provides a liquid and transparent investment product that can be traded on an exchange like a stock.
• Offers diversified (within its theme) exposure to a specific sector, appealing to investors seeking thematic plays.

What Industry Does ACES Operate In?

The ALPS Clean Energy ETF (ACES) operates within the broader financial services sector, specifically carving a niche in the asset management industry as a thematic exchange-traded fund. It is positioned within the rapidly expanding segment of ESG (Environmental, Social, and Governance) and thematic investing, catering to investors seeking direct exposure to the clean energy transition. The clean energy industry itself is characterized by robust growth, driven by global decarbonization efforts, technological innovation, and significant governmental policy support. Market trends indicate a sustained shift away from fossil fuels towards renewable sources like solar, wind, and hydropower, alongside advancements in energy storage, electric vehicles, and smart grid technologies. ACES distinguishes itself by focusing exclusively on North American companies, providing a regionalized play within this global trend. The competitive landscape for clean energy ETFs is becoming increasingly crowded, with numerous funds offering varying geographical focuses, index methodologies, and expense ratios. ACES competes with other broad clean energy ETFs, as well as more specialized funds targeting specific sub-sectors like solar or wind. Its specific underlying index, the CIBC Atlas Clean Energy Index, defines its unique portfolio composition, aiming to capture a representative basket of companies contributing to the clean energy ecosystem across the U.S. and Canada. The fund's market capitalization of $127.48M places it among the smaller, more specialized thematic ETFs, appealing to investors looking for a concentrated, high-beta exposure to this evolving sector.

Who Are ACES's Key Customers?

• Institutional investors seeking thematic exposure to the clean energy sector.
• Retail investors interested in participating in the growth of renewable energy and clean technology.
• Financial advisors building diversified portfolios with specific sector allocations.
• Investors looking for a passive, rules-based approach to investing in the clean energy economy.

ACES Valuation & Market Position

With a $127.48M market cap, ALPS Clean Energy ETF sits in the micro-cap segment of the market. Relative to its peer group, ACES's quantitative score of 44/100 is below the peer average of 70/100.

ROE 0%Key Financial Metrics

Return on equity for ALPS Clean Energy ETF stands at 0.0%, a gauge of how efficiently it converts shareholder capital into profit. Return on assets is 0.0%, showing how much profit it generates from its asset base. ACES trades at a trailing price-to-earnings ratio of 0.00, below the Financial Services sector average of ~18x. Its free cash flow yield is 0.0%, a gauge of the cash the business throws off relative to its market value. A current ratio of 0.00 means current liabilities exceed short-term assets, a liquidity point worth watching. Its earnings yield is 0.0%, the inverse of the P/E and a quick read on earnings relative to price.

ACES Financials

ACES Latest News

ACES Analyst Consensus

ACES MoonshotScore

Common Questions About ACES (Financial Services)

Disclaimer: This content is for informational purposes only and does not constitute investment advice. Always do your own research and consult a financial advisor.

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