For Energy Investors, Is a Traditional Energy ETF a Better Bet Than Clean Energy?
State Street's fossil fuel fund delivered 41% returns over one year with far lower volatility, while iShares' renewable basket posted 33% gains but carries five times higher fees.
Overview
Investors choosing between State Street Energy Select Sector SPDR ETF (NYSEMKT:XLE) and iShares Global Clean Energy ETF (NASDAQ:ICLN) face a choice between low-cost traditional fossil fuel exposure and a broader, utility-heavy renewable energy basket.
Both funds target the energy industry but offer fundamentally different strategies. While the State Street fund tracks the performance of large-cap energy companies within the S&P 500, ICLN focuses on global companies that produce energy from renewable sources like solar and wind. This comparison highlights how these distinct approaches impact cost, volatility, and historical returns, noting that the State Street fund has $39.5 billion in assets under management (AUM) compared to the iShares fund at $2.4 billion.
Details
Beta measures price volatility relative to the S&P 500; beta is calculated from monthly returns over the available fund history (up to five years). The 1-yr return represents total return over the trailing 12 months. Dividend yield is the trailing-12-month distribution yield as of the close of trading on July 23.
Source
Originally published at www.fool.com.