Core Viewpoint - Clean energy equities and related ETFs, such as the ALPS Clean Energy ETF (ACES), have shown significant recovery, with ACES increasing by 42% over the 12 months ending February 4, 2025, indicating a resurgence in this asset class driven by strong fundamental outlooks and increasing electrification demands, particularly influenced by artificial intelligence [1]. Group 1: Market Trends - The clean energy sector is experiencing a rebound after years of underperformance, with ACES and similar ETFs benefiting from broader electrification trends and digital infrastructure investments [1]. - The demand for power is shifting from efficiency to growth, driven by the electrification of vehicles, buildings, and homes, as well as the expansion of digital infrastructure [1]. Group 2: Investment Insights - ACES, as a passively managed ETF, provides exposure to various clean energy adoption trends, positioning investors to benefit from long-term themes such as AI electrification and clean energy infrastructure demands [1]. - The economic advantages of clean energy sources, such as solar and wind, have made them significantly cheaper than traditional fossil fuels, contributing to the sector's growth [1]. Group 3: Infrastructure Development - The construction timelines for clean energy facilities are notably shorter than those for fossil fuel or nuclear facilities, with solar, wind, and energy storage taking about 18 months compared to 6-12 years for gas and nuclear [1]. - Nearly 100% of additional power built in the US last year came from solar, wind, and energy storage, highlighting the rapid growth and adoption of clean energy technologies [1].

Core Insights - The energy consumption for AI is expected to significantly increase, with projections indicating that data center electricity demand driven by AI will more than double by 2030, reaching approximately 945 terawatt-hours (TWh) [4] - The global economic impact of AI could reach $15 trillion by 2030, with a considerable portion derived from applications that enhance sustainability and energy efficiency [4] - Clean energy ETFs like the ALPS Clean Energy ETF (ACES) are positioned to benefit from the rising demand for clean energy solutions as AI technologies advance [1][2] Group 1: Investment Implications - The ALPS Clean Energy ETF (ACES) has shown strong performance, with a market capitalization of $117.44 million, and is expected to continue its upward trajectory due to the growing clean energy sector [2] - The clean energy sector is not solely reliant on AI; factors such as global adoption and decreasing costs also contribute positively to the performance of ACES member firms [2] - Companies that integrate AI with sustainable practices are emerging as market leaders, positioning themselves for long-term growth in the transition to cleaner energy systems [5] Group 2: AI and Clean Energy Synergy - Many hyperscale data center companies are adopting carbon-aware practices and are committed to reducing emissions, which aligns with the clean energy focus of ACES [4] - Some holdings within ACES, such as Itron, are closely linked to AI initiatives, exemplified by a partnership with Microsoft to enhance grid integrity and renewable energy usage [6] - The intersection of AI and clean energy presents a unique investment opportunity, as firms leveraging AI for energy efficiency are likely to thrive in a more sustainable future [5]

Core Insights - Clean energy ETFs, despite achieving double-digit gains in 2025, are facing challenges in attracting assets as the renewable energy sector grows rapidly [1][2] Group 1: Market Performance - The ALPS Clean Energy ETF (ACES) has returned 31.9% year-to-date and 25.2% over the past year, but shows a three-year annualized loss of 13.2% [1][4] - Global renewable power capacity is expected to double in the next five years, with an increase of 4,600 gigawatts [2] Group 2: Fund Composition - ACES tracks North American clean energy stocks, holding 48 companies across various sectors including solar, wind, electric vehicles, and battery storage [3][5] - The top holdings in ACES include Nextracker Inc. (6.5%), Eos Energy Enterprises, Inc. (5.7%), and First Solar, Inc. (5.6%) [5] - Electric vehicle manufacturers like Tesla, Rivian, and Lucid Group also represent significant portions of the fund's holdings [6] Group 3: Industry Trends - The U.S. ranks second globally in new solar growth, generating 190 terawatt hours of solar energy in the first half of 2025 [7] - The current clean energy boom in the U.S. is partly driven by businesses capitalizing on Biden-era clean energy tax credits before they expire [8]