As Clean Energy Forges On, Check Out the CTEC ETF

The clean energy trade continues to persist in the early going of 2021, and it’s not too late for investors to joins in with funds like the Global X CleanTech ETF (CTEC).

At a 0.50% expense ratio, CTEC seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of the Indxx Global CleanTech Index. The fund invests at least 80% of its total assets, plus borrowings for investments purposes, in the securities of the index and in ADRs, GDRs based on the securities in the index.

The 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. Overall, the fund gives investors exposure to:

  • High Growth Potential: CTEC enables investors to access high growth potential through companies at the leading edge of a structural shift in global energy use.
  • An Unconstrained Approach: CTEC’s composition transcends classic sector, industry, and geographic classifications by tracking an emerging theme.
  • ETF Efficiency: In a single trade, CTEC delivers access to dozens of companies with high exposure to the clean tech theme.

CTEC Chart

A Move Toward Clean Energy

The blue wave push continues to be the major catalyst for renewable energy sources. It’s an interesting dichotomy with the rise of oil prices, which are both feeding into an energy rally that started late last year.

“The risks of climate change are real and urgent,” a U.S. News & World Report article explained. “President Joe Biden is aggressively pushing the U.S. to catch up with the rest of the world on sustainability efforts. So far, there’s little in the way of specifics, other than big gestures of commitment like rejoining the Paris climate agreement.”

“Investors have been scurrying around lately for any sign of what industries may benefit most from government policies, placing bets on everything from electric vehicles to power grid upgrades,” the article added. “One way to tap into the focus on clean energy without picking individual winners and losers is simply to look at one of the clean energy exchange-traded funds, or ETFs, that are out there.”

CTEC is up almost 40% within the past 12 months.

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