First Trust : Listing of a green energy fund by First Trust based on a Nasdaq Index, listed today on the Frankfurt stock exchange and on Wednesday on the Amsterdam stock exchange
The launch of this clean energy ETF provides clients with a diversified yet targeted approach to playing both sides of the supply / demand equation. This includes exposure across renewable electricity generation, advanced materials, energy intelligence, energy storage and conversion and electric vehicle names.
About the First Trust NASDAQ Clean Edge Green Energy ETF (QCLN)
The product tracks the performance of global clean energy companies listed in the US involved in areas such as smart grid, hybrid batteries, solar/wind/geothermal electricity or advanced materials (that enable clean-energy or reduce the need for petroleum products).
Constituents include leading companies in this field like Tesla, Plug Power, or SolarEdge Technologies. Selection of the companies in the index is made by Clean Edge, a global expert in clean energy indices.
First Trust launched a first ETF on this index in the US in 2007 which has gathered USD 3.40 billion in AUM since then. This new ETF, based on the same index, has been listed in the London Stock Exchange on the 2nd of February 2021 and is now cross-listed across Europe.
The ETF distinguishes itself from others by its diversification, thanks to a high number of constituents (44) selected based on revenue exposure to clean energy (minimum of 50% of revenues from clean energy) and which are all capped to better represent the industry and all its subsectors.
The index overperforms similar indices significantly, with a year to date performance of 24% as of the beginning of February 2021.
Why clean energy matters
World energy consumption is set to rise to nearly 50% by 2050 (according to the EIA here), as the global population is growing from 7.7 billion in 2019 to 11.2 billion by the end of the century (source here).
Sources of energy consumption have changed dramatically over time; renewables accounted for 11% of the energy market in 2019.
Investment in green energy represented USD 54 billion for Europe in 2019, compared to USD 55 billion for the US and USD 83 billion for China (source: Statistica).
2020 was a record year for clean energy, as Covid-19 triggered the need for many to switch to more sustainable sources of energy. Solar and wind in particular are becoming the first choice amongst both retail and corporate customers.
Rupert Haddon, Managing Director, Head of Sales & Distribution, First Trust, commented: “We are delighted to offer our investors cost-effective exposure to a unique and diversified basket of stocks that are embracing the world’s continued pivot to cleaner energy. We look to provide investors with an intelligent way to invest in the energy transition, illustrated by us partnering with industry specialists Nasdaq and Clean Edge. This Fund further demonstrates our commitment to our clients here in Europe adding to our already strong suite of thematic ETFs.”
Baris Parla, Managing Director, Nasdaq Indexes, added: “We are seeing tremendous growth from the disruptive technology companies in the green and renewable energy space. Our continued partnership with First Trust and Clean Edge is vital in providing investors access to companies dedicated to building a more sustainable future.”