This is a passive thematic ETF that tracks an index of companies involved in the global wind energy industry. It diversifies across wind value chain companies, including wind power operators and turbine and component manufacturers.

It suits investors who want concentrated exposure to the wind energy theme and can tolerate policy and thematic volatility as well as currency fluctuations.

It is a passive (index-tracking) ETF managed by First Trust.

The ETF tracks an index of companies that generate a significant share of their revenue from the wind industry, such as wind power operators and wind turbine and component manufacturers. By concentrating on the wind value chain, it gives exposure to the growth of the wind industry, but it is sensitive to policy and interest rate environments and is concentrated in a single theme.

• Concentrated in the wind value chain
• Diversified across global wind companies

Assets under management (AUM) stand at $193.5M, and the total expense ratio is 0.60% per year.

The main point of comparison is its concentration in the single wind theme, versus broad infrastructure or natural resources ETFs.

Wind-related stocks are driven by renewable energy policy, interest rates, and energy prices. They tend to be strong when renewable support policies are strengthened and weak when interest rates rise or policies are rolled back. Because the industry is capital intensive, it reacts sensitively to interest rates.

Fund flows into the wind theme diverge depending on renewable energy policy, the interest rate environment, and demand for eco-friendly investing, and money sometimes moves into related products when expectations for renewable policy grow. It is also worth noting that performance can vary widely depending on the policy and interest rate environment.

Its strengths are its focus on the wind theme and its growth potential, while policy sensitivity, interest rate risk, and thematic concentration are considerations.

For exposure to broad global infrastructure, direct substitutes include IGF, and for exposure to natural resources companies, products such as GUNR are also worth comparing. If you want other global natural resources exposure, a product such as GNR can be considered as well. The three products shown in the table, IGF, GUNR, and GNR, differ in scope from the single wind theme, covering infrastructure and natural resources respectively, and this ETF's concentration in the wind value chain is the differentiating criterion.

Here are the points to review before investing in FAN. Its focus on the wind theme and its growth potential are attractive, but policy sensitivity, interest rate risk, and thematic concentration need to be checked in advance. It is also a good idea to compare it with broad infrastructure and natural resources products.

The main variables for performance are the impact of rolled-back renewable support policies and rising interest rates on wind companies' earnings and share prices. Because the ETF is concentrated in the single wind theme, its thematic risk is greater than that of diversified products. It could fall sharply if the policy and interest rate environment worsens.

It is a suitable candidate for investors who want concentrated exposure to the wind energy theme. If you want to diversify across broad infrastructure and natural resources, consider products such as IGF and GNR, and if you want concentrated exposure to the wind value chain, it is advisable to compare this product alongside them before choosing.