2021 has been a pivotal year for investors.
From meme stocks to trillions of dollars committed to sustainable investing…
Here at The Financial Star, we have been following these trends closely.
From governments to public and private companies… ESG (environmental, social, and governance) has been in the news constantly.
And it didn’t disappoint those who invested in it.
The ESG trend has been one of the major winners this year… both in terms of interest and in terms of performance.
As of writing, this popular exchange-traded fund that tracks an ESG-linked index delivered a 28% return in 2021, outperforming the S&P 500 by almost three percentage points.
Looking ahead, we don’t anticipate this trend to slow down..
ESG movements gained nearly $130 Trillion in private capital along with additional government support.
As a result, sustainability-linked trends and companies will certainly be part of our focus next year.
Unlike other trends that come and go quickly, ESG is here to stay, we strongly believe.
And that bodes well for the clean energy companies, plant-based food and nuclear power, as well as “green commodities” such as copper, nickel, cobalt, ammonia, along with others like “green” cryptocurrencies.
There are several great ways to get exposure to ESG; let’s look at some of the best performers in each category.
Winner #1: Ammonia
In May, we covered two major alternative fuels: hydrogen and ammonia, both of which have a strong chance of becoming the default power source for the long-haul transportation industry.
These fuels solve global problems lithium can’t.
For ammonia, the price has moved quite a bit this year. By one measure, it’s up about 110% since our article was published back in May.
Year-to-date, the price of ammonia is up 315%.
In our opinion, this is only the beginning of this trend. Ammonia has many uses, including agriculture. So, like other assets and sectors that we pay attention to, there is more than one driver at work. This is what you want as an investor.
Winner #2: Ether
Ether is the world’s second most popular cryptocurrency.
Ether has the promise to be “greener” than bitcoin.
Bitcoin came under heavy criticism this year for having a considerably negative impact on the environment, and all because the creation and transfer of Bitcoin consumes a lot of power, which often comes from cheap and dirty sources like coal.
In June, we presented cleaner alternatives to bitcoin.
Etherium was our number one candidate.
Since then, its price has soared by over 80%.
The creators of Ether announced they would go green and address the environmental issues that took a toll on bitcoin this year.
Going forward, Ether is worth watching for the investors interested in “green crypto.”
There are other cryptocurrencies that claim to be even greener, but the fact that ether has both liquidity and name recognition is also important.
The reason is simple. Cryptocurrencies are quite easy to create at this point. But without proper recognition, they risk disappearing and becoming worthless.
Treating any new cryptocurrency as a start-up could be a good approach. Even the best ideas can fail because of the factors that are outside the founders’ control.
Established players in the crypto sphere are a safer bet. They could be wildly volatile, but in 2021 a lot of cryptocurrencies, including bitcoin and ether, became household names. This hard-earned fame is worth a lot in the crypto area. In our opinion, Etherium provides a balance between sustainability and popularity. In the crypto world, you need both to survive.
Winner #3: Semiconductors
This year, the world faced a semiconductor shortage. The small chips that are now part of everything from smartphones to refrigerators became almost impossible to procure.
Car manufacturers were impacted, as well as countless other sectors.
In May, we wrote about this $400-billion market and the supply chain issues that global manufacturers were facing.
With skyrocketing demand and crumbling supply chains, semiconductor manufacturers were in a great place.
Since then, an ETF tracking US-listed semiconductor stocks has delivered a 29% return.
As a reminder, we are talking about an article published in May.
Since the beginning of the year, this ETF has delivered a 44% return.
Semiconductors will likely continue their success because the world is going digital. Covid and remote work has now changed how corporations manage their data centers… electric vehicles are becoming more popular, and artificial intelligence is becoming more widespread.
Lastly, the world has started talking about the metaverse seriously in late 2021.
We’ve started to cover the metaverse, though this topic has only just begun. Look out for the metaverse being a part of more conversations in the coming year.
For now, just know this: the metaverse requires a lot of computing power. It’s like a world that runs on microprocessors and graphics cards. As the metaverse becomes more popular, the world’s appetite for powerful computers will increase.
These trends have been the winners of 2021. And within each of them, some companies have delivered impressive growth.
We will continue covering the most exciting trends and events next year.
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Thank you for subscribing, and we wish you a happy holiday season.
Thank you for your loyal readership,The Financial Star team