The iShares Global Clean Energy ETF (ICLN) tracks the S&P Global Clean Energy Index, providing targeted exposure to companies leading the production of solar, wind, and other renewable energy sources.
As the largest and most liquid fund in the sector, it offers diversified access to both developed and emerging markets, allowing investors to capitalize on global decarbonization policies. Notably, the fund’s underlying index was expanded in 2021 to broaden its holdings, reducing concentration risk while maintaining pure-play leverage to the energy transition.
However, for long-term Indian investors, ICLN carries a critical structural risk: The US Estate Tax. If you hold US-domiciled assets (like ICLN) and your portfolio value exceeds $60,000, the US government levies a 40% Estate Tax on the excess amount upon your death. This creates an unnecessary risk that can wipe out nearly half of the wealth intended for your heirs.
This blog gives you all the information you need about the top UCITS alternatives. While the first option listed below tracks the exact same index as ICLN, others offer optimized approaches such as equal weighting to avoid concentration or broader exposure to electric vehicles and battery technology, providing robust access to the energy transition without the estate tax risk.
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Why Indians are looking for UCITS alternatives to ICLN
Indian investors are shifting to UCITS alternatives because they solve the tax risks and inefficiencies of US ETFs like ICLN while providing the exact same exposure.
- Estate Tax Protection: UCITS funds are typically domiciled in Ireland. They are not considered "US-situs" assets, meaning they are 100% exempt from the 40% US Estate Tax.
- Tax Deferral (Accumulation): Unlike ICLN, which forces taxable cash dividends on you, many UCITS funds offer "Accumulating" classes that reinvest dividends automatically. This reduces your tax liability in India and defers it until you sell the fund.
To learn more about UCITS ETFs and why Indian investors are choosing them, read our guide on UCITS ETFs.
Popular UCITS Alternatives for ICLN
Here are the top three UCITS funds that serve as the best proxies for global clean energy exposure.
1. iShares Global Clean Energy UCITS ETF
This is the official European twin of ICLN, managed by the same provider, BlackRock (iShares). It tracks the exact same S&P Global Clean Energy Index, giving you identical exposure to the largest global wind, solar, and renewable utility companies. As by far the largest and most liquid clean energy ETF in Europe, it is the default choice if you want the exact same portfolio as the US version but within the European regulatory framework.
- Ticker: INRG (Distributing) / IQQH (Accumulating)
- Total Expense Ratio (TER): 0.65%
- Structure: Available in both Distributing and Accumulating
- Top Holdings: First Solar, Enphase Energy, Vestas Wind Systems, Iberdrola SA, Consolidated Edison.
2. L&G Clean Energy UCITS ETF
One major criticism of ICLN and its twin INRG is their heavy concentration in a few mega cap green energy stocks, which has historically caused severe volatility and liquidity crunches. RENW solves this by tracking the ROBO Global Clean Energy Index. This index takes a modified equal weighted approach across the entire clean energy value chain, including solar, wind, energy storage, and smart grid technology. This structure provides better diversification, prevents a single stock's poor performance from dragging down the entire fund, and is noticeably cheaper to hold than the BlackRock version.
- Ticker: RENW
- Total Expense Ratio (TER): 0.49%
- Structure: Accumulating
- Top Holdings: NKT A/S, Hubbell, Eaton Corp, First Solar, Fluence Energy (Because this fund uses a modified equal weight structure, the top holdings are simply the companies that have most recently outperformed before the next rebalancing).
3. First Trust Nasdaq Clean Edge Green Energy UCITS ETF
If you want a clean energy fund that behaves a bit more like a technology ETF, QCLN is a highly compelling alternative to ICLN. While ICLN focuses heavily on traditional renewable utility companies and turbine manufacturers that are notoriously sensitive to interest rates, QCLN includes electric vehicles, battery tech, advanced materials, energy storage, and semiconductors. This provides a broader play on the energy transition, offering exposure to companies like Tesla and ON Semiconductor for a more aggressive, US leaning growth profile.
- Ticker: QCLN
- Total Expense Ratio (TER): 0.60%
- Structure: Accumulating
- Top Holdings: First Solar, Tesla, Enphase Energy, ON Semiconductor, Albemarle Corp.
Invest in UCITS ETFs with Paasa
Paasa is a global investing platform designed for Indian investors. We provide direct access to over 10 global exchanges, including the United States, United Kingdom, Switzerland, Hong Kong, Germany, France, Canada, Netherlands, Japan, and Singapore.
This means you are not restricted to just US ETFs like the ICLN; you can also buy tax-efficient UCITS equivalents using Paasa.
The Compliance Advantage
Paasa makes global investing easy and also removes the compliance friction with a specialized layer built specifically for Indian residents:
- Schedule FA Reporting: Exact reports you need for your Indian tax returns, eliminating the need for manual calculations.
- Tax Filing & Advice: Access to expert tax advice and seamless filing support.
- FEMA & LRS Integration: Guidance on FEMA regulations and LRS limits to ensure compliance.
Whether you are buying direct US stocks or investing in UCITS ETFs listed on European exchanges, Paasa provides global access with India-specific compliance and tax support.
