Why Clean Energy ETFs Have Wind in Their Sails

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ETFs with tickers such as TAN and FAN are doing particularly well this year. The first, the Invesco Solar ETF, has returned about 7% year to date and 95% over 12 months. The second, First Trust’s Global Wind Energy ETF, is up 20% year to date and 67% over a year. It isn’t any surprise that petroleum-themed funds have appreciated significantly amid a war in the Middle East, but the rising need for energy has also lifted renewables and nuclear.

“There has been this long-term idea that renewables will be taking more of oil’s breakfast over time,” said Kenneth Lamont, principal in manager research for Morningstar UK. But, “when the price of energy spikes, all energy goes up.”

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Another product, the $2.6 billion United States Oil Fund (USO), shows how the oil and gas industry’s returns are a recent story, as year-to-date returns are about 80%, compared with 12-month returns of 85%. Solar and wind, by comparison, had more of a boost last year, which is part of the saga about the insatiable demand for power for AI data centers. Going along with that, VanEck’s $4.6 billion Uranium and Nuclear ETF (NLR) is up 10% so far this year, but 96% over 12 months.

But, sales data show differences in demand:

• USO brought in more than $800 million in the first three months of 2026, compared with just under that amount for NLR. But over a year, NLR brought in $2.8 billion, while USO saw less than $800 million in net flows, per data from Morningstar Direct.

• Meanwhile, $350 million went into the $1.5 billion TAN this year through March, compared with just $7 million for the $249 million FAN.

Rising Sea Level Lifts All Boats: Globally, investors pulled money from energy ETFs as a category last year, with net outflows of about $8 billion, per Morningstar. So far this year, though, about $16 billion has poured in. ETFs in the company’s energy-transition category are another matter: Those saw over $5 billion in net inflow this year through April 10 and a total of over $10 billion over 12 months, with only 10 of the prior 52 weeks in net outflows. “It’s not one-to-one,” Lamont said of the demand for energy across fossil fuels, renewables and nuclear. “It’s a highly complex market.”

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