Soaring oil prices and Russia’s ongoing war against Ukraine – two issues joined at the hip – are reminders that energy independence is paramount for many developed nations and some emerging markets, too.
High energy costs, which show little sign of relenting over the near term, and geopolitical conflict involving energy-rich nations are also reminders that energy security is national security. More and more, renewable energy is seen as a vital part of attaining that security and that could be a long-term boon for exchange traded funds, such as the SPDR Kensho Clean Power ETF (CNRG).
The $275.73 million CNRG follows the S&P Kensho Clean Power Index, which features exposure to solar, wind, geothermal, and hydroelectric power, among other clean energy concepts and technologies. CNRG’s broad-based portfolio is relevant not only today but to long-term renewable energy investors as well.
“Investors, keen to get ahead of the curve as well as earn profits with purpose, will be more keenly seeking out the opportunities as the world scrabbles to mitigate the environmental, economic, and social fallout of the current situation – a situation which is likely to be a constant risk moving forward,” says de Vere Group CEO Nigel Green in a recent note.
To its credit, CNRG is showing its mettle in a rough market environment, indicating there is some ballast for the right renewable energy exchange traded funds stemming from the war in Eastern Europe.
Entering the May 31 trading session, CNRG was down 6.72% year-to-date, outpacing the S&P 500 by nearly 600 basis points. That’s arguably surprising when considering that renewable energy ETFs are typically chock full of growth and technology stocks – two of the broader market’s worst offenders in 2022. It can be argued that CNRG’s relative sturdiness is confirmation it’s proving responsive to war in Europe.
“The current situation around the world must be dealt with in the short-term; but it has brought into sharp focus that rather than staying with fossil fuels, the longer-term answer to this and future energy crunches is to accelerate investment into sustainable projects that deliver cleaner power,” adds Green.
Overall, there’s no getting around the fact that a modern energy crisis is either here or close to arriving and that highlights the need to up commitments to renewables, which would benefit CNRG member firms.
“The worsening global energy crisis is a defining issue of our time, and it represents a key opportunity for investors seeking to build long-term wealth with a purpose,” concludes de Vere’s Green.
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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.