Is This the Right Time to Bet on Clean Energy ETFs?

Core Insights - Despite President Trump's reduction in clean energy funding, investments in clean energy remain appealing due to increasing AI-driven electricity demand and decreasing renewable energy costs [1][2] - The S&P Global Clean Energy Transition Index has seen a year-to-date increase of 56.19% and a quarterly increase of 16.26% [1] Investment Trends - Investment funds continue to be active in U.S. renewables, driven by strong market fundamentals and the urgent need to modernize the power grid [2] - Brookfield raised a record $20 billion for its Global Transition Fund II, with an additional $3.5 billion in co-investments, and secured significant clean energy supply deals with Microsoft and Google [4] Market Demand - U.S. power demand is projected to grow by 2.5% in 2025 and 2.7% in 2026, driven by data center expansion, renewed manufacturing, and overall electrification [6] - The global clean energy investment reached $2.2 trillion last year, more than double the fossil fuel investment, with significant growth in solar, wind, and electric vehicle sales [7] AI Influence - The surge in AI demand is prompting major tech companies to secure clean energy for their data centers, with the global AI market expected to exceed $1.6 trillion by 2032, enhancing the attractiveness of clean energy investments [8] ETF Performance - Clean energy ETFs are gaining traction, with several funds showing significant returns over the past month and three months, such as: - iShares Global Clean Energy ETF: 7.51% (1 month), 18.07% (3 months) [10] - First Trust NASDAQ Clean Edge Green Energy Index Fund: 10.74% (1 month), 28.37% (3 months) [12] - SPDR S&P Kensho Clean Power ETF: 15% (1 month), 42.22% (3 months) [13] - ALPS Clean Energy ETF: 9.07% (1 month), 24.20% (3 months) [14] - Invesco Global Clean Energy ETF: 6.63% (1 month), 20.48% (3 months) [15]