Not judging a book by its cover is often relevant advice and it’s applicable in the world of investing, too.
It’s often useful and true in the world of exchange traded funds where product names can imply one thing while investment objectives are something else altogether. The IQ Cleaner Transport ETF (CLNR) isn’t necessarily part of that group. The fund does provide exposure to the clean transportation theme, but it also represents a broader avenue to clean energy investing.
The depth offered by CLNR is relevant to prospective investors because the renewable energy space is vast and evolving rapidly. Related ETFs should be able to keep pace.
“While the transition away from fossil fuels may take decades to complete — and many risks exist as companies attempt to shift their business models — there may be opportunities along the way that can benefit investors and help support the shift to a cleaner future. Here are three ways investors can navigate the rapidly changing landscape,” according to Charles Schwab research.
CLNR could also gather momentum as the legislative environment becomes more hospitable to renewable energy spending. Recently, clean energy equities, including some CLNR components, rallied on news that Senate Democrats may finally be able to push long-awaited spending measures across the finish line. However, there are avenues of spending that can provide long-term support to CLNR member firms and that’s a point investors should evaluate.
“Amid public insistence and global agreement, more government funding for clean-energy incentives and mandates is on the way. Regulations aside, many companies are already pivoting toward more environmentally friendly practices in response to consumer and investor demand,” added Schwab.
Of course, as its name implies, CLNR has ties to the electric vehicle movement. Several of its holdings are electric vehicle manufacturers, which is a potentially compelling trait because data indicate there’s still plenty of growth ahead for that industry.
“From 2015 through 2020, the combined number of all-electric and hybrid vehicles on the road in the U.S. more than tripled,3 and number of combustion-engine vehicles within the global fleet will peak in 2038, according to government projections,” noted Schwab.
Combine the aforementioned factors with other opportunities through the vast renewable energy investment spectrum and CLNR could be an attractive idea for market participants willing to take the long view of clean energy.
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The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.