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Green Energy QCLN: EVs, Solar And Wind, Oh My

Michael Fitzsimmons profile picture
Michael Fitzsimmons


  • The Clean Edge Green Energy Index ETF is a First Trust ETF offering that has demonstrated a solid long-term track record, tracking the NASDAQ Index of the same name.
  • Tesla is the #1 holding at nearly 10%. Solar and wind-related stocks are also well represented in the top-10 holdings.
  • Before you think QCLN  is a call on the November election, read on.
  • Long term, I like this ETF, short term it's highly valued. Initiate a toe-hold position and wait for a market pullback to buy more.

A headline story in this week's Barron's Magazine (see Trump or Biden: These ETFs Should Climb Either Way) make a case that First Trust's Clean Edge Green Energy Index ETF (NASDAQ:QCLN) will generate decent returns regardless of who wins in November. Over the past 10 years, QCLN has delivered an annualized return of 9% and while there is no doubt a Biden victory would be seen as a "win" for green energy adoption from a high-level policy perspective, it's important to acknowledge that QCLN is up 156% since Trump won the election in November of 2016:

Source: Yahoo Finance

However, note the vast majority of those gains have come in the big NASDAQ rally since the March lows. And much of from the ETF's #1 holding: Tesla (TSLA), which has a roughly 10% weight in the portfolio. Tesla is well-covered, so I won't go into great details here on the positives/negatives of the company other than to mention that the stock's valuation, in my opinion, is indicative that Tesla is being valued for more than an EV maker. Investors are starting to realize that Tesla will likely transform itself into an electric ecosystem provider, including batteries, battery storage systems, as well as the controllers and software that surround these systems.

Wind and Solar Capacity: 2020 A Record Year

The ETF has been successful during the Trump administration's time in office because of continued steady and strong growth in wind and solar capacity in the United States. In fact, wind and solar will dominate new energy capacity in the US this year. Of the 42 GW of new electricity capacity this year, the EIA expects solar and wind will represent nearly 32 GW, or 76%, of the additions:

Source: EIA

Wind accounts for the largest share of additions at 44%, followed by

This article was written by

Michael Fitzsimmons profile picture
Technology stocks, ETFs, portfolio strategy, renewable energy, and O&G companies. Primary goal is growing net-worth. I typically allocate a portion of my own portfolio and devote some of my SA articles to small and medium sized companies offering compelling risk/reward propositions. I am an Electronics Engineer, not a qualified investment advisor. While the information and data presented in my articles are obtained from company documents and/or sources believed to be reliable, they have not been independently verified. Therefore, I cannot guarantee its accuracy. I advise investors conduct their own research and due-diligence and to consult a qualified investment advisor. I explicitly disclaim any liability that may arise from investment decisions you make based on my articles. Thanks for reading and I wish you much investment success!

Analyst’s Disclosure: I am/we are long IDRV. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

I am an engineer, not a CFA. The information and data presented in this article were obtained from company documents and/or sources believed to be reliable, but have not been independently verified. Therefore, the author cannot guarantee their accuracy. Please do your own research and contact a qualified investment advisor. I am not responsible for the investment decisions you make.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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