As far as exchange traded funds with tons of momentum, iShares S&P Global Clean Energy ETF (NASDAQ:ICLN) is one of the best picks for Canadian investors today, for a few reasons. In this article, I'm going to touch on two of the key drivers underpinning this ETF, and why I believe this is a high growth area.
The first key factor I think investors interested in green energy should consider is the long-term view of this sector. There has been some very rapid share price appreciation for various clean energy companies. The 10-year return of ICLN and is only roughly 1% at the time of writing. The sector has been unloved and has broadly underperformed the overall stock market by a wide margin over the past decade, to a degree that substantial. This recent rise, therefore can be viewed as a reversion toward the mean. This implies significant long term upside as valuation to clean energy concerns continue to balloon.
Another key factor investors should consider is that we are still in a world with a Trump presidency. Obama and the Democratic Party have left the legacy of heavily investing in renewable energy and the clean energy sector. Therefore, massive capital inflows at both the public and private levels could significantly impact this ETF, as it holds mostly U.S. based options.
Invest wisely, my friends.
