Rising inflation and geopolitical forces are helping oil prices rise to stratospheric levels. In the background, however, the push towards green energy continues, which provides a growth opportunity for the First Trust NASDAQ Clean Edge Green Energy Index Fund (QCLN).
QCLN follows the NASDAQ® Clean Edge® Green Energy Index. QCLN’s underlying index “includes companies engaged in manufacturing, development, distribution and installation of emerging clean-energy technologies including, but not limited to, solar photovoltaics, wind power, advanced batteries, fuel cells, and electric vehicles,” according to First Trust.
Oil and broad energy funds that hold a lot of big names in the oil industry are seeing the gains. However, it’s green energy that’s been seeing demand behind the curtains.
“Well, interestingly, as we’ve had this sort of rally in oil on the backs of these geopolitical concerns, it’s been interesting to see green energy plays actually get a lot of traction,” said Dave Nadig, ETF Trends’ CIO & director of research.
A Growth Opportunity for the Patient Investor
Getting growth exposure also means that the investor must exercise patience in order for the opportunity to bear fruit. In the case of QCLN, patient investors have been rewarded with a gain of over 200% within the last five years.
That performance is over double the S&P 500 Global Clean Energy Index. Under the hood of QCLN, investors will see familiar household names like Tesla and a variety of growth-oriented names that have been contributing to its performance.
Summary of QCLN:
- The index is a modified market capitalization-weighted index designed to track the performance of clean energy companies that are publicly traded in the United States and includes companies engaged in the manufacturing, development, distribution, and installation of emerging clean energy technologies including, but not limited to, solar photovoltaics, wind power, advanced batteries, fuel cells, and electric vehicles.
- The NASDAQ® Clean Edge® Green Energy IndexSM is a modified market cap-weighted index in which larger companies receive a larger index weighting. The index weighting methodology includes caps to prevent high concentrations among larger alternative energy stocks.
- The index is reconstituted twice a year in March and September and rebalanced quarterly.
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