The SPDR Kensho Clean Power ETF (CNRG) is picking up where it left off in 2020. Momentum from last year is already spilling over into 2021, as the fund is already up over 17% to start the new year.
CNRG seeks to provide investment results that, before fees and expenses, correspond generally to the total return performance of the S&P Kensho Clean Power Index. Under normal market conditions, the fund generally invests substantially all, but at least 80%, of its total assets in the securities comprising the index.
The index is designed to capture companies whose products and services are driving innovation behind clean power. The fund may invest in equity securities that are not included in the index, cash and cash equivalents, or money market instruments, such as repurchase agreements and money market funds.
CNRG ended 2020 up over 100%. The fund has been on a steady upclimb since the pandemic shook the markets last year and its momentum looks tough to stop.
Looking at its one-year chart below, the fund is up over 170%:
Technical indicators like the relative strength index (RSI) and moving average convergence divergence (MACD) confirm CNRG’s momentum. If you’re looking at CNRG as a long-term buy and hold, price action might not be as important, but an ideal entry point would be to get in on an area of value.
The RSI in the near-term 3-month chart is well into overbought levels at 83.97. The exponential moving average (EMA) line is above the signal line using the MACD indicator, which suggests the market for CNRG might be overheated.
Nonetheless, it’s difficult to stop momentum once it gets going, and an incoming Biden administration could propel CNRG even further.
Blue is Good For Green
An incoming Joe Biden presidency is helping to fuel demand for clean energy ETFs.
“Clean-energy exchange-traded funds roared higher Wednesday as Democrats inched closer to clinching control of Washington,” a MarketWatch report said.
Traders and investors alike are placing their bets that more blue in the White House can lead to more green in ESG funds.
“Investors are betting that Democrats will prioritize clean-energy policies, as well as stimulus spending to help make those policies real,” the report added.
For more news and information, visit the ESG Channel.