Renewable Energy ETFs Ride Wave of AI Optimism

Renewable energy ETFs are making a comeback after a dismal showing in the first half of the year. And much of the gains have been fueled by an unlikely source – the rising tide of bullishness over artificial intelligence.

AI is poised to accelerate and propel the energy transition, being both a heavy consumer and facilitator of clean energy.

NAV Returns: Back in the Green

Renewable energy ETFs have ridden the AI hype train and have rallied on a total return basis. In fact, eight of the top 12 best-performing ETFs over the past month have been closely linked to the energy transition.

A pair of hydrogen-focused funds – the Global X Hydrogen ETF (HYDR) and the Defiance Next Gen H2 ETF (HDRO) – have risen more than 25% apiece. Both ETFs offer pureplay exposure to global companies involved in hydrogen production spanning multiple industries.

Beyond hydrogen, there’s also the ProShares S&P Kensho Cleantech ETF (CTEX) – which invests more broadly in companies developing green technologies, like solar, wind and geothermal – and the Invesco Solar ETF (TAN), the largest and most liquid solar ETF.