The green hydrogen ETFs are a new breed of investment. They offer a way for investors to gain exposure to the rapidly growing market for hydrogen fuel and technologies. But, like all investments, they come with their own set of risks and rewards. In this article, we’ll take a closer look at some popular green hydrogen ETFs and what sets them apart from one another.
First, let’s define what we mean by “green hydrogen.” This refers to hydrogen that is produced through electrolysis using renewable energy sources like solar or wind power. This is in contrast to “gray hydrogen,” which is produced using fossil fuels like natural gas.
First Trust NASDAQ Clean Edge Green Energy Index Fund
The First Trust NASDAQ Clean Edge Green Energy Index Fund (QCLN) is an exchange-traded fund (ETF) that tracks the performance of the NASDAQ Clean Edge Green Energy Index. The index is made up of green hydrogen stocks involved in the production and distribution of clean energy, including solar, wind, and hydrogen fuel cells. The ETF was first launched in 2005, making it one of the oldest and most established green energy ETFs in the market.
The QCLN ETF provides investors with broad exposure to the clean energy market, and it is a good option for those who want to gain exposure to a variety of clean energy technologies and companies. The ETF is considered to be a passive investment, meaning that it aims to track the performance of the index it is based on, rather than trying to outperform it.
What Companies are in QCLN ETF?
The QCLN ETF holds a diverse portfolio of companies across different sectors of the clean energy market, including renewable energy, energy storage, and energy efficiency. Some of the top holdings in the ETF include Tesla, NextEra Energy, and Canadian Solar.
The QCLN ETF is considered to be a relatively low-cost investment, with an expense ratio of 0.60%. It also has a moderate level of liquidity, making it easy to buy and sell shares on the market.
Global X Lithium & Battery Tech ETF (LIT)
Another popular green hydrogen ETF is the Global X Lithium & Battery Tech ETF (LIT). This ETF is focused on companies that are involved in the production and distribution of lithium-ion batteries and other energy storage technologies. While hydrogen fuel cells are not the primary focus of this ETF, many of the companies included in the index are also involved in the development of hydrogen fuel cell technologies. Some of the top stocks within the ETF are Tesla, SQM and CATL.
VanEck Vectors Low Carbon Energy ETF (SMOG)
A third ETF is the VanEck Vectors Low Carbon Energy ETF (SMOG), This ETF tracks companies involved in the low-carbon energy space, including those focused on hydrogen production and distribution. Here are some facts for potential investors on SMOG
- The ETF was first launched in March 2020, so it is relatively new in the market.
- The ETF holds a diverse portfolio of companies across different sectors of the low-carbon energy market, including renewable energy, energy storage, energy efficiency and hydrogen production.
- The ETF has a low expense ratio of 0.35%, making it an attractive option for cost-conscious investors.
- The ETF has a moderate level of liquidity, making it easy to buy and sell shares on the market.
- The ETF has a relatively high yield of 1.41% which is higher than the average yield of the ETFs in the same category.
- The ETF’s top holdings include Plug Power Inc, Ballard Power Systems Inc, and FuelCell Energy Inc, all companies that are actively involved in the hydrogen fuel cell industry.
What sets these ETFs apart from one another is their focus. The QCLN ETF is focused on the broader clean energy market, while the LIT ETF is focused on lithium-ion batteries and other energy storage technologies. The SMOG ETF is more focused on the low-carbon energy space, including hydrogen production and distribution.
Green hydrogen ETFs offer investors a way to gain exposure to the rapidly growing market for hydrogen fuel and technologies. However, it’s important to understand the differences between these ETFs and to choose one that aligns with your investment goals. As with any investment, it’s important to do your own research and consult with a financial advisor before making a decision.