This Growth ETF Could Soar in 2024

The First Trust NASDAQ Clean Edge Green Energy Index Fund (QCLN -0.28%) is tailor-made for investors seeking exposure to a variety of clean energy solutions, from utilities to technology companies, automakers, lithium producers, semiconductor companies, industrial suppliers, and more.

But the exchange-traded fund (ETF) is down 21.3% so far year to date (YTD) — easily underperforming the S&P 500‘s 21% YTD gain. Here’s why the ETF could soar in 2024 and why it may be right (or wrong) for you.

A purposeful investment

The Clean Edge Energy Fund is ideally suited for someone who wants to invest in the energy transition, not just a particular industry. The largest holding is Tesla, and the third largest holding is Rivian Automotive — two electric vehicle (EV) companies. But the second largest holding is ON Semiconductor Corporation, a key supplier of chips for drive trains used in EVs.

The fourth largest holding is First Solar, a panel manufacturer, while the sixth largest holding is Enphase Energy, which is a solar inverter and solar solution company that converts DC power to AC power, mostly for residential customers. Then you have Albemarle, a lithium supplier, as the fifth largest holding. Those six top holdings make up 42.9% of the total fund.

So right off the bat, you can see a lot of variety from the fund’s top holdings. As you go down the line, you’ll find exposure to companies you may have never heard of, especially in alternative energy.

A good chunk of the fund is invested in unproven, unprofitable growth stocks. For that reason, the fund may not be suited for everyone. But if you’re fine with taking on risk or waiting for a play to pan out, then the Clean Edge Energy Fund’s aggressive allocation and…

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