Invesco's PBW ETF tracks the WilderHill® Clean Energy Index, focusing on companies advancing clean energy and pollution prevention. PBW's selection process emphasizes ecological and technical criteria over financial metrics, resulting in a unique but undiversified portfolio. PBW underperformed the S&P 500 over five years (-52% vs. +71%) but outperformed over the past year (29% vs. 19%).
A $10,000 stake in the Invesco WilderHill Clean Energy ETF (NYSEARCA:PBW) at Thursday's close was worth ~$8,920 by Friday's close, and the cause traces directly to a sharp move in two-year Treasury yields rather than to anything inside a single clean energy company.
I upgrade Invesco WilderHill Clean Energy ETF to 'Buy,' citing strong momentum and compelling valuation. PBW has returned 95% over 16 months, outperforming the S&P 500 by 70 percentage points. The ETF trades just under 20x earnings with a long-term EPS growth rate of 23%, yielding a PEG below 1.
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This fund is designed for investors looking to align their investment strategies with environmental sustainability practices. By committing at least 90% of its total assets to securities listed in its underlying index, the fund specifically targets companies significantly involved in cleaner energy advancement and conservation. The underlying index itself is comprised of stocks from publicly traded companies in the U.S., which are deemed significant for the development of clean energy. The selection of these companies is based on an evaluation by the index provider, which identifies firms that are expected to benefit substantially from a societal transition towards the use of cleaner, carbon-neutral energy sources and conservation efforts.