A Banner Year for Clean Energy: The iShares ETF’s Momentum and Market Position

iShares Global Clean Energy ETF US4642882249

The iShares Global Clean Energy ETF (ICLN) is carrying significant momentum into 2026. This follows an exceptionally strong performance last year, underpinned by a powerful structural shift: the worldwide demand for dependable, clean power is surging. This demand is being fueled primarily by the artificial intelligence boom and the broad electrification of the global economy. The central question for investors is whether the fund can sustain this trajectory.

With a total expense ratio (TER) of 0.39%, the iShares fund presents a cost advantage over comparable products. For instance, the Invesco Solar ETF (TAN) charges 0.69%, and the First Trust NASDAQ Clean Edge Green Energy ETF (QCLN) has a TER of 0.58%. This cost efficiency is a notable feature of ICLN. Furthermore, its investment approach offers a purer exposure to utility and power generation companies. While TAN concentrates on the solar supply chain and QCLN includes electric vehicle manufacturers, ICLN maintains a clearer thematic focus.

The fund's portfolio, though broad with approximately 101 holdings, is notably concentrated. Its top ten positions account for over 52% of the fund's assets. Leading the list are Bloom Energy (8.78%) and First Solar (8.70%). Geographically, the ETF has its largest exposure in the United States (34.8%), followed by China (13.3%) and Brazil (9.0%). Sector allocation is decisively tilted toward utilities (48.5%) and industrials (25.4%).

Fundamental Drivers Powering Growth

The renewable energy sector is currently experiencing an unprecedented wave of capital investment. A key catalyst is the exploding power needs of data centers, with electricity demand projected to jump by 17% by 2026. Meeting this colossal requirement necessitates massive investment in low-carbon baseload power generation and modernized grid infrastructure. In the United States alone, utility companies have earmarked roughly $197 billion for generation capacity and grid spending in 2026.

An emerging trend sees large-scale power consumers, particularly major technology firms, investing directly in on-site renewable energy generation. These long-term power purchase agreements create stable, predictable revenue streams for the producers and utility companies held within the ETF.

Performance Outlook and Key Catalysts

The year 2025 was a record period for the ICLN ETF, delivering a total return of approximately 47%. This robust recovery followed several years of weakness and was ignited by a late-year rally in energy-related technology stocks. Since the start of 2026, the fund has undergone a phase of mild consolidation.

The future performance of the ETF will be heavily influenced by the capital expenditure plans of major utility companies, which directly impact top holdings like Iberdrola and Vestas Wind Systems. Additionally, the fund's underlying index is scheduled for its semi-annual rebalancing in April 2026. This adjustment is expected to recalibrate weightings for companies operating in geothermal and hydrogen energy segments.