IDEAS home Printed from https://ideas.repec.org/h/spr/conchp/978-3-031-96428-2_11.html
   My bibliography  Save this book chapter

Smart Grid ETFS: Evaluating Risk, Return, and Diversification Benefits in Sustainable Investment Portfolios

Author

Listed:
  • Cristiana Tudor

    (Bucharest University of Economic Studies)

  • Robert Sova

    (Bucharest University of Economic Studies)

Abstract

The smart grid plays a pivotal role in advancing sustainability and achieving the goals of the 2030 Agenda for Sustainable Development. By integrating advanced digital technologies smart grids improve the efficiency and reliability of electricity transmission, while supporting large-scale renewable energy integration. This paper analyzes the financial landscape of smart grid technologies through a comprehensive examination of Exchange-Traded Funds (ETFs) that invest in this sector. Using portfolio optimization techniques, including Monte Carlo simulation and efficient frontier analysis, the study evaluates the risk-return profiles and diversification benefits of smart grid ETFs compared to traditional diversified portfolios. The results show that smart grid ETFs like GRID exhibit annualized returns of approximately 20% with a volatility of around 25%, which is significantly higher than the returns of traditional energy sector ETFs like XLE, which show a return of 8% but with a higher volatility of around 35%. This study provides insights for investors and policymakers by demonstrating that smart grid ETFs offer a strategic opportunity to increase portfolio performance while aligning with sustainable investment objectives.

Suggested Citation

  • Cristiana Tudor & Robert Sova, 2025. "Smart Grid ETFS: Evaluating Risk, Return, and Diversification Benefits in Sustainable Investment Portfolios," Contributions to Economics,, Springer.
    • Handle: RePEc:spr:conchp:978-3-031-96428-2_11
    DOI: 10.1007/978-3-031-96428-2_11
    as

    Download full text from publisher

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a
    for a similarly titled item that would be available.

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;
    ;
    ;
    ;
    ;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spr:conchp:978-3-031-96428-2_11. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.