The Global X CleanTech ETF (CTEC) is one of the newest entrants to the clean energy exchange traded funds lineup, but it’s already showing it’s got plenty of potential.
CTEC, which debuted in late October, follows the Indxx Global CleanTech Index and provides exposure to companies “involved in renewable energy production, energy storage, smart grid implementation, residential/commercial energy efficiency, and/or the production and provision of pollution-reducing products and solutions,” according to Global X.
A strong case can be made CTEC is among the more well-timed new ETFs that have come to market in 2020.
“Moreover, the International Energy Agency predicts that renewable sources like wind, solar, and nuclear energy will grow by 50% over the next five years – a situation that will benefit stocks like those that comprise Global X’s CTEC ETF,” reports FX Empire. “The ESG ETF market has also seen tremendous growth over the past decade to broadly defined market value of $45 trillion in 2020.”
Call On CTEC
CTEC’s underlying index is designed to provide exposure to exchange-listed companies that are positioned to benefit from the increased adoption of technologies focused on improving the efficiency of renewable energy production and/or mitigating the adverse environmental effects of resource consumption.
“The Global X CleanTech ETF (CTEC) has been posting higher highs during intraday activity since the instrument was launched, although each of those sessions has been met with strong selling pressure,” according to FX Empire. “If this trend continues over the next few months, it would be plausible to see the ETF surging to the $21 price level, which represents a 9.3% short-term upside. Meanwhile, at least two out of the three holdings analyzed here are exhibiting bullish signals that could end up pushing the ETF to those levels.”
Additionally, CTEC has the benefit of a favorable administration soon to enter the White House.
CTEC is performing well with a Republican in the White House, though that speaks more to the shift to renewables and declining costs than Trump Administration-specific action. Adding to the long-term case for CTEC is that many of the policies benefiting renewable energy producers are taking place at the state level, indicating CTEC and rival funds can deal with changes in the White House.
In just about two months on the market, CTEC already has $45.34 million in assets under management.
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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.