Happy Monday, as we begin this holiday-shortened work week. Congress is preparing an early Christmas gift for the markets as they put the finishing touches on a $900 bln relief package. The relief measures will be paired with a $1.4 trl spending package that will keep the government funded through September of next year. One interesting aspect will be how the markets react to some of the restrictive language around Fed powers. For now we will save the role of the grinch for someone else and pivot to take a look at searches by Financial Advisors last week and prepare you for 2021.
- Trivia Question- Alternative energy in focus today so we have three solar dates to highlight: 1) What year did Alexandre Edmond Becquerel first observe the photovoltaic effect; 2) What year did Charles Fritts develop the first solar cell (1% efficiency) and 3) What year did Bell Labs produce the first practical solar cell (6% efficiency)? (Answer below)
In November, we witnessed a transition of power as former Vice President Joe Biden edged out incumbent President Donald Trump in one of the tightest races in Presidential history. Under President-elect Biden, the nation is expected to push forward with an aggressive pursuit of alternative energy sources. This would help explain the trends we witnessed in Q4, where Financial Advisors searches into the Alternative Energy Equities ETF categories surged 315% quarter-over-quarter in Q4. The Invesco Solar ETF (TAN), which is up 211% year-to-date, has been a constant on our FA search list and ranked 14th last week.
|RANK||TOP ETFS – BY ALL FAs (Total Traffic) Last Week||Ticker||TOP ETFS BY FAs w/ AUM>$1B (Total Traffic) Last Week||Ticker||ETF CATEGORIES SPOTLIGHT- EMERGING MARKET EQUITIES (Total Traffic) Last Week||ETF CATEGORIES SPOTLIGHT- ALTERNATIVE ENERGY EQUITIES (Total Traffic) Last Week|
|1||SPDR S&P 500 ETF||SPY||SPDR S&P 500 ETF||SPY||VWO||TAN|
|2||Invesco QQQ||QQQ||VanEck Vectors Gold Miners ETF||GDX||FM||QCLN|
|3||Direxion Daily S&P 500 Bull 3X Shares||SPXL||Invesco QQQ||QQQ||EMQQ||GRID|
|4||iShares Russell 2000 ETF||IWM||iShares Russell 2000 ETF||IWM||SCHE||ACES|
|5||SPDR Gold Trust||GLD||iShares Core S&P Mid-Cap ETF||IJH||SPEM||ICLN|
|6||Technology Select Sector SPDR Fund||XLK||Financial Select Sector SPDR Fund||XLF||EEMD||CNRG|
|7||VanEck Vectors Gold Miners ETF||GDX||Invesco Taxable Municipal Bond ETF||BAB||DEM||PBD|
|8||Energy Select Sector SPDR Fund||XLE||Invesco DB US Dollar Index Bullish Fund||UUP||EZA||AAXJ|
|9||Consumer Discretionary Select Sector SPDR Fund||XLY||ARK Fintech Innovation ETF||ARKF||EMIF||IDX|
|10||iShares Silver Trust||SLV||MicroSectors U.S. Big Oil Index 3X Leveraged ETN||NRGU|
|11||ARK Innovation ETF||ARKK||Invesco Solar ETF||TAN|
|12||ProShares Ultra VIX Short-Term Futures||UVXY||iShares MSCI Emerging Markets ETF||EEM|
|13||SPDR Dow Jones Industrial Average ETF||DIA||SPDR S&P Regional Banking ETF||KRE|
|14||Invesco Solar ETF||TAN||MicroSectors FANG+? Index -3X Inverse Leveraged ETN||FNGD|
|15||ProShares UltraPro Short QQQ||SQQQ||VanEck Vectors Coal ETF||KOL|
|16||ProShares UltraPro QQQ||TQQQ||Global X Silver Miners ETF||SIL|
|17||VanEck Vectors Semiconductor ETF||SMH||iShares Gold Trust||IAU|
|18||Health Care Select Sector SPDR Fund||XLV||ARK Genomic Revolution ETF||ARKG|
|19||Utilities Select Sector SPDR Fund||XLU||ProShares UltraPro Short Dow30||SDOW|
|20||iPath Series B S&P 500 VIX Short-Term Futures ETN||VXX||VanEck Vectors Oil Services ETF||OIH|
Taking a glance at President-elect Biden’s plan, he has outlined a $2 trl climate proposal aimed at making the United States power sector carbon free by 2035, while pushing the country to net zero emissions by 2050. Biden has promised to require aggressive limits on pollution in the oil and gas operations, develop rigorous new fuel economy standards, protect the Arctic National Wildlife, and re-enter the U.S. into the Paris Climate Agreement. Biden plans to invest $400 bln over the next 10 years in clean energy and innovation.
Alternative energy was a bright spot in 2020 and this trend should continue into 2021. We are highlighting the Alternative Energy ETF Category today as we take a closer look into one of the hottest industries. Here are some of the clean energy ETFs that were seeing the most interest among Financial Advisor peers:
- QCLN- Holds a broad list of U.S.-listed companies in the clean energy space. It has an Expense Ratio of 0.60%; Price to Earnings at 318x; Price to Book at 4.73%. Top Holdings include NIO (12%), ENPH (7%), TSLA (6%), SEDG (5%), ALB (5%). Average Daily Share Volume is 629K.
- GRID- Tracks a market-weighted index of global equities and the smart grid and electrical energy infrastructure sector. It has an Expense Ratio of 0.70%; Price to Earnings is 29x; Price to Book 2.7x; Top Holdings include: Aptiv (9%), Schneider Electric (7%), JCI (7%), Eaton (7%), ABB (6%), ENPH (6%); Average Daily Share Volume 21K.
- ACES- Tracks a list of U.S. and Canada-based companies in the clean energy space. It has an Expense Ratio of 0.55%; Price to Earnings at 255x; Price to Book at 4x; Top Holdings include: PLUG (8%), ENPH (8%), SRUN (6%), TSLA (6%), CREE (5%). Average Daily Share Volume 105K.
- ICLN- Tracks a market-cap-weighted index of 30 of the most liquid companies involved in businesses related to clean energy. The Expense Ratio is 0.46%; Price to Earnings 45x; Price to Book 3x; Top Holdings include: PLUG (5%), ENPH (5%), Meridian (5%), VERBUND (5%), Vestas (5%), Siemens (5%); Average Daily Share Volume 4.22 mln.
Trivia Answer- 1) Alexandre Edmond Becquerel observed the photovoltaic effect in 1839; 2) Charles Fritts developed the first solar cell in 1883 and 3) Bell Labs produced the first practical solar cell in April 25, 1954.In response the New York Times stated that solar cells would eventually lead to a source of “limitless energy of the sun.”