On this week’s episode of the SS&C ALPS Advisors’ Building Blocks podcast, Investment Strategy Advisor Danny Schwab and Senior Investment Strategy Advisor Paul Baiocchi sat down with Andy Hicks, Director of ETF Portfolio Management and Research, to discuss the rally in renewable energy stocks in 2020 and the clean energy tailwinds for 2021.
Much of this episode is in direct connection to the ALPS Clean Energy ETF (ACES). ACES tracks a market-cap-weighted index of North American companies involved in the clean energy industry. The index provider targets companies that enable the evolution of a more sustainable energy sector and includes renewable energy sources, clean technologies, and any other emerging clean energy technology. All companies involved in clean energy businesses and listed in the US or Canada are eligible for inclusion.
As far as what is currently taking place, Hicks explains how the whole energy space reacts to the clean energy stimulus bill. There are plenty of plans and proposals noted in relation to solar, wind, biofuels, infrastructure, and other bill beneficiaries related to the sector.
Hicks adds, “That diverse broad spectrum of clean energy, I want to emphasize, is not just solar and wind. It’s more than that, across many different segments, and they’re all really seeing a big beneficiary from not just stimulus and subsidies but this inflection point in the market.”
In the past, the clean energy sector has been propped up as something exciting, only to see so much as a result. This time things are different. As Hicks states, the subsidies and stimulus plans have been in place, but there’s a cost inflection. It’s become a notably respectable aspect from a business perspective, which is key. It’s cheaper to build clean energy-based commercial/industrial/residential-powered structures, as opposed to natural gas or coal, and on a global level.
“That inflection point is getting institutional money very interested in the space,” says Hicks.
Head to the SS&C ALPS Advisors website to hear the entire episode and more of the Building Blocks podcast.
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