Investing Green: Global X CleanTech ETFIn this post, I'll be introducing a way you can gain expose yourself to green investments through Global X CleanTech ETF ($CTEC).
Disclaimer: This is not financial advice. This is for educational and entertainment purposes only. I am not responsible for the profits or loss generated from your investments. Trade and invest at your own risk.
The Potential of Green Investing
- President Joe Biden is expected to unveil a new $1.75 trillion spending framework on Thursday, which will include $555 billion for clean energy investments.
- The spending targets emissions-reducing technologies across buildings, transportation, industry, electricity and agriculture.
- The dollars earmarked for climate spending focus on incentives rather than punishments.
- The initiatives will start cutting pollution now, with more than one gigaton of greenhouse gas emissions reduced in 2030.
- This will set the U.S. on a path to reduce emissions by 50% to 52% below 2005′s levels by 2030.
- The plan includes a 10-year expansion of tax credits for utility-scale and residential clean energy, transmission, storage, electric vehicles and clean energy manufacturing.
- More than $100 billion is set aside for resilience investments as extreme weather events, including wildfires fueled by climate change, batter the U.S.
Framework Breakdown
- $320 billion: Clean energy tax credits
- $105 billion: Resilience investments
- $110 billion: Investments and incentives for clean energy technology, manufacturing and supply chains
- $20 billion: Clean energy procurement
Information about the ETF
- The Global X CleanTech ETF (CTEC) seeks to invest in companies that stand to benefit from the increased adoption of technologies that inhibit or reduce negative environmental impacts.
- This includes 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.
- Inception Date: Oct 27, 2020
- Total Expense Ratio: 0.5%
- Net Assets: $187.38B
- Net Asset Value (NAV): $22.23
Top 10 Holdings
1. PLUG POWER INC (PLUG) - 8.02%
2. ENPHASE ENERGY INC (ENPH) - 7.60%
3. VESTAS WIND SYSTEMS A/S (VWS DC) - 5.71%
4. SIEMENS GAMESA R (SGRE SM) - 5.24%
5. SAMSUNG SDI CO LTD (006400 KS) - 5.19%
6. SOLAREDGE TECHNO (SEDG) - 5.10%
7. XINYI SOLAR HOLDINGS LTD (968 HK) - 4.89%
8. FIRST SOLAR INC (FLSR) - 4.80%
9. QUANTUMSCAPE CORP (QS) - 4.33%
10. JOHNSON MATTHEY PLC (JMAT LN) - 3.66%
Technical Analysis
- This ETF has undergone a long phase of accumulation between $16-21
- While it has broken out of the accumulation range, there are two main levels of resistance it needs to break; $23.3 and $29.6
- We could expect the ETF to test the now resistance-turned-support in the form of a pullback before moving up to create higher lows and higher highs
- Based on the fibonacci retracement level, we could consider the 1.618 a plausible long term target.
Conclusion
The US government is investing heavily in cleantech, and paving way for green companies to grow, and it's highly likely that other governments will begin to do the same across the world. Finding a specific winner for their cause might be difficult, but this ETF allows you to gain exposure to a variety of cleantech companies. While this ETF doesn't have a long track record, it's managed by a reputable company. Technically, we have broken out of the accumulation range, and yet the price is still close to the ETF's net asset value, providing high upside potential for the mid to long term.
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