As ESG investing keeps on growing, clean energy initiatives will keep the sun shining on clean energy ETFs 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 CleanTech theme.
CTEC is up almost 20% thus far in early going of 2021, with heavy volume in anticipation of a Joe Biden administration that will be conducive to clean energy policies. With that heavy volume, there’s also strong momentum, as indicated by the relative strength index (RSI) at 69.94.
Future Government Subsidies for Clean Energy Tech?
The strength of CTEC could be banking on future governmental policies like more subsidies for clean energy technology. This will only help consumers get more access to clean energy tech that was once too expensive for most.
“You do have Biden with a Democrat Senate behind him, which keeps him very focused on a $2 trillion infrastructure plan, which is inclusive of clean tech as well. On the consumer side of things, you see more and more people installing solar panels, buying electric vehicles. Electric vehicle sales were up 70% in China this year alone. And if you look at the business environment, you’re seeing that a lot of what’s happening with ESG is not just about investing, it’s about changing how companies operate.”
CTEC’s top holding is an 11% allocation to Plug Power, which focuses on renewable energy. Just to highlight the strength of the clean energy sector right now, the stock is up over 80% year-to-date.
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