The path to clean is green: this seems to be a common refrain as the world becomes more reliant on alternative energy in order to reduce carbon contamination in the atmosphere. This creates opportunities for clean energy exchange traded funds (ETFs).
Global mass adoption is already making its way into data. So far wind and solar energy are seeing the most usage.
“As more countries tipped into mass adoption, wind and solar became the cheapest sources of new electricity capacity worldwide, according to BloombergNEF data,” said a Bloomberg report. “Cost declined so much that it’s no longer the biggest obstacle to expansion.”
With that, the challenge shifts to logistical means to try to interconnect these networks of alternative energy use.
“Now it’s about permitting, interconnecting, central planning around grids,” said Logan Goldie-Scot, head of clean power research at BloombergNEF. “These processes aren’t always able to keep up with the economics.”
ETF Opportunities in Clean Energy
As global adoption continues, clean energy technology will be necessary to meet this demand. As such, one growth opportunity to consider is 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 and 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.
CTEC enables investors to access high growth potential through companies at the leading edge of a structural shift in global energy use. CTEC’s composition transcends classic sector, industry, and geographic classifications by tracking an emerging theme.
One of the benefits of an ETF wrapper is its dynamism with respect to getting in and out of positions, as well as broad-based exposure to sector-specific themes. As such, in a single trade, CTEC delivers access to dozens of companies with high exposure to the clean tech theme.
Wind and solar power, as mentioned in the Bloomberg data, are also poised for mass global adoption. As such, traders can also check out the Global X Solar ETF (RAYS) as well as the Global X Wind Energy ETF (WNDY).
For more news, information, and strategy, visit the Thematic Investing Channel.