Clean Air During COVID-19 Shines Spotlight on Renewable Energy ETFs

One unforeseen byproduct of the COVID-19 pandemic is less air pollution as lockdown restrictions have forced less travel worldwide, thereby reducing emissions. According to a Phys Org article, data collected in Delhi, India shows that cleaner air allows more sunlight to reach solar panels, which can help benefit renewable energy exchange-traded funds (ETFs).

The data was published in a June 19 issue of Joule.

“Delhi is one of the most polluted cities on the planet,” says first author Ian Marius Peters of Helmholtz-Institut Erlangen-Nürnberg for Renewable Energies in Germany, as reported in a Phys Org article. “Moreover, India enacted a drastic and sudden lockdown at the start of the pandemic. That means that reductions in air pollution happened very suddenly, making them easier to detect.”

Investors who want to take advantage of lower costs in the solar energy sector can look to ETFs like the Invesco Solar ETF (NYSEArca: TAN). TAN, which started back in 2008, seeks to track the investment results of the MAC Global Solar Energy Index, which is designed to provide exposure to companies listed on exchanges in developed markets that derive a significant amount of their revenues from the following business segments of the solar industry: solar power equipment producers including ancillary or enabling products.

“The pandemic has been a dramatic event in so many ways, and the world will emerge different than how it was before,” Peters says. “We’ve gotten a glimpse of what a world with better air looks like and see that there may be an opportunity to ‘flatten the climate curve.’ I believe solar panels can play an important role, and that going forward having more PV installations could help drive a positive feedback loop that will result in clearer and cleaner skies.”

A Leveraged, Broad Energy Play

For a leveraged broad market play on energy, traders can consider funds like the Direxion Daily Energy Bull 3X Shares (NYSEArca: ERX) for bullish plays and the Direxion Daily Energy Bear 3X Shares (ERY) for bearish opportunities should they arise. ERX rose 2.19% at the close of Monday’s session.

Fund features:

  • ERX seeks daily investment results equal to 300% of the daily performance of the Energy Select Sector Index. The index is provided by S&P Dow Jones Indices and includes domestic companies from the energy sector which includes the following industries: oil, gas and consumable fuels; and energy equipment and services.
  • On the other end of the spectrum, ERY seeks daily investment results that equate to 300% of the inverse of the daily performance of the Energy Select Sector Index. The index is provided by S&P Dow Jones Indices and includes domestic companies from the energy sector which includes the following industries: oil, gas and consumable fuels; and energy equipment and services.

For more market trends, visit ETF Trends.

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