Tuesday, 24 March 2020

iShares Global Clean Energy ETF - Update

This exchange traded fund gives investors an opportunity to invest in a wide range of globally diverse companies involved in renewable energy.

It is an index fund and tracks the S&P Global Clean Energy Index which is made up of 30 of the worlds leading companies in the clean energy sector.

The fund was added to my green portfolio last March, shortly after I put my index funds under the spotlight and decided to move my portfolio away from fossil fuels. My initial purchase price was 433p and later in the year I topped up my holding at 490p and topped up a third time last week at 435p. The shares are held in my SIPP drawdown and also my ISA with AJ Bell Youinvest.

The ETF fund holdings include :

Enphase (6.6%) a global energy technology company and the worlds leading supplier of solar microinverters. These connect solar generation, storage and management on one intelligent platform. The shares are listed on the US Nasdaq exchange and have grown quickly over the past year from $9 to currently $32.

Solaredge Technologies (5.5%) another Nasdaq-listed US company providing inverter solutions across all segments of the solar PV market. Over the past year the stock has risen from $38 to currently $79.

Vestas Wind (6.5%) one I also hold as a stand-alone in my portfolio

Siemens Gamesa (7.4%) a Spanish-based renewable engineering company involved in the manufacturing of wind turbines and related servicing. Their products have been installed in over 90 countries all around the world with a current combined capacity of 100GW.

Returns

The fund had a good run over the past year reaching a high point of 620p in mid February but was obviously affected by the global sell-off and the share price dropped back around 30%. At the current price of 439p my total return has been  -5.0% for the year including dividends of 8.2p which is a yield of just below 2.0% and subject to exchange fluctuations.

The global renewable energy sector is likely to see continued growth over the coming decade as the world attempts to address the climate crisis and move to curb carbon emissions. We are weaning our economies off fossil fuels and the transition to clean energy such as wind, solar and wave power is well underway and likely to accelerate. As can be seen from the chart, the global renewables represented by INRG has performed much better than the oil sector represented by RDSB.
 
One Year Share Price  INRG v RDSB
(click to enlarge)

I have taken a punt on a few individual companies such as Orsted, Ceres Power and Vestas Wind for example but a diversified approach with the likes of this ETF probably makes more sense so I am happy to continue holding these shares. They currently make up around 9% of my green portfolio.

Once we get past the coronavirus panic, I am hoping this ETF will bounce back but for the time being I think it's just a case of sit tight and try not to panic!

As ever, this article is merely a record of my personal investment decisions and should not be regarded as an endorsement or recommendation - always DYOR!

4 comments:

  1. Oil companies have hurt as much if not more?

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  2. Thanks diy, hope all is well with you and yours.

    I only have a small holding of IRNG but hope to top up. It's one of the few 'specialised' ETFs I hold, the others being AGES and IH2O. I think they provide a bit of diversification to my usual global index trackers.

    All the best.

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    Replies
    1. Yep, all good here weenie. Biggest decision is whether to go for my walk in the morning or afternoon!

      I had not heard about the iShares over 60s themed fund before - if this virus carries on for a few more months, there won't be many of us left!!

      Stay safe, follow the advice and let's hope we're not in lockdown for too long and risk to life can be kept as low as possible.

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