Introduction to Thematic Investing in Renewable Energy

Thematic investing involves targeting specific trends or themes that are expected to drive growth in certain sectors. In recent years, renewable energy has emerged as a prominent theme due to increasing global awareness of climate change, government policies favoring sustainable energy, and advancements in technology. This article presents three practical examples of thematic investing in renewable energy, illustrating how investors can capitalize on this trend.

Example 1: NextEra Energy Partners, LP

NextEra Energy Partners is a significant player in the renewable energy sector, primarily focusing on wind and solar energy projects. The company operates a portfolio of renewable energy facilities that generate cash flows through long-term power purchase agreements. This creates a stable income stream for investors.

NextEra Energy Partners went public in 2014, and since then, it has expanded its portfolio through acquisitions of renewable energy assets. Its strategic focus on sustainable energy aligns with the growing demand for clean energy sources.

Notes:

• The company has consistently increased its dividend payouts, attracting income-focused investors.
• The stock has shown impressive growth due to its strong fundamentals and alignment with environmental goals.

Example 2: iShares Global Clean Energy ETF (ICLN)

The iShares Global Clean Energy ETF is an exchange-traded fund (ETF) that tracks the performance of companies involved in the production of clean energy. This includes sectors such as solar, wind, and other renewable energy sources. The ETF offers investors broad exposure to the clean energy market without needing to pick individual stocks.

Launched in 2008, ICLN has provided investors with a convenient way to invest in a diversified portfolio of clean energy companies. As of October 2023, the ETF includes major players like Enphase Energy and First Solar, along with smaller companies, providing a diversified investment strategy.

Notes:

• The ETF has seen significant growth in line with increasing investments in renewable energy.
• Investors can easily buy and sell shares on stock exchanges, making it a flexible investment option.

Example 3: Brookfield Renewable Partners L.P.

Brookfield Renewable Partners is a global leader in renewable power, with a diverse portfolio that includes hydroelectric, wind, and solar facilities across North America, South America, Europe, and Asia. The company focuses on acquiring and operating renewable energy assets, emphasizing sustainable practices.

In 2020, Brookfield announced plans to invest $5 billion in renewable energy projects over the next five years, leveraging its extensive experience in the sector to drive growth. This strategic investment is aimed at expanding its renewable energy capacity and supporting global efforts to transition to cleaner energy sources.

Notes:

• Brookfield Renewable Partners has a strong track record of delivering stable cash flows and returns to investors.
• The company is also known for its commitment to sustainability and environmental stewardship, appealing to socially conscious investors.