Looking for a way to buck common market wisdom? Many investors may be in a holding pattern to start 2025, already having made a few moves to end 2024. Those investors may be expecting a new presidential administration to make big changes and drive the market narrative for the first half of the year. While that may be true to some extent, the common wisdom remains: Focus on large-caps and tech, and maybe smaller firms, too. One contrarian play, however, could surprise investors and markets if the federal government remains bogged down in infighting.
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That contrarian play? Clean energy technology. One might assume that a new Trump administration would be the death knell of clean energy tech. While the administration isn’t likely to foster new initiatives for clean energy, clean energy technology remains an important energy and tech subsector.
ACES: A Contrarian Play?
Tesla (TSLA), for example, a clean energy stock for many strategies, remains a key market leader in vehicles. The auto industry has made a large commitment to electric vehicles that may receive less federal support. Those cars will still sell, however, and remain an important growth opportunity for those companies.
The federal government may also already be balking at tariffs as currently imagined by the president-elect. While much remains to be seen, and the president-elect remains adamant about high tariffs, they may not arrive as painfully as initially feared. That might ease some stress for tech areas, including clean energy tech.
Perhaps most important for clean energy tech is the interest rate outlook. The impact of rate cuts is still filtering through the financial system, potentially setting the stage for a healthy year in clean tech.
While not the most traditional contrarian play, clean energy could surprise. The ALPS Clean Energy ETF (ACES) presents one option to buck the narrative. Charging 55 basis points, ACES invests in U.S.- and Canadian-listed clean energy firms. That includes electric vehicles, renewable energy sources, battery tech, and more. That diversification both geographically and in terms of its targeted firms gives it greater depth than an EV ETF would offer, for example.
ACES has started 2025 on a bright note, returning 4.2% YTD, per YCharts data. With its long-term case still appealing, and the opportunity to stick while others twist, ACES can offer a contrarian opportunity worth watching.
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