Clean energy stocks are an interesting place to be in 2025. The new administration came in and changed the policy landscape surrounding renewables, cutting credits and financial support from the public sector. That said, renewables are still here, and many projects are still going forward. Indeed, a variety of factors are pushing renewable stocks forward despite those headwinds, helping the space perform for investors. One clean energy ETF, FRNW, may be of interest, particularly amid those trends.
The Fidelity Clean Energy ETF (FRNW) has returned 58.8% YTD, per YCharts data as of October 21. Over the last three months, as well, the clean energy ETF has returned 27%, suggesting continued momentum. How, then, has the fund produced those returns, and what might its outlook be for the rest of the year?
The ETF charges a 40 basis point fee for its approach. FRNW tracks the Fidelity Clean Energy Index, a market cap-weighted list of global clean energy companies. Perhaps the most intriguing part of the fund’s approach is its global view. While it does of course have a large focus on U.S. stocks, it can invest around the world.
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Specifically, the fund invests in clean energy stocks from developed and emerging markets with a focus on some key areas. That includes areas like clean energy distribution, clean energy equipment manufacturing, and clean energy technology.
That has led the clean energy ETF to invest in clean energy stocks like Bloom Energy Corporation (BE). BE focuses on the manufacture and distribution of its natural gas or biogas power generation platform. It converts those energy sources into electricity without combustion.
BE has returned a remarkable 391% this year, according to YCharts data. The stock stands out as the largest equity stock in FRNW’s portfolio as of October 21st. The fund also invests in foreign clean energy firms like Spain-based EDP Renovaveis SA (EDRVF). The company, which focuses on wind power generation, has returned 53.9% YTD.
Together, stocks like those have helped the clean energy ETF perform and beat its peers. With continued investment outside the U.S. and rates falling domestically, the fund could potentially be poised for further enticing performance.
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Fidelity Investments® is an independent company unaffiliated with VettaFi LLC (“VettaFi”). These articles do not form any kind of legal partnership, agency affiliation, or similar relationship between VettaFi and Fidelity Investments, nor is such a relationship created or implied by the articles herein. VettaFi LLC is the author and owner of these articles.
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