Tim Nash, founder of Good Investing
Focus: Green investing (renewable energy stocks and green REITs)

MARKET OUTLOOK

Political winds are blowing against green initiatives in North America right now. The public wants cheap energy and has elected politicians that promise short-term relief while ignoring long-term risks. 2018’s summer has given us a taste of what’s to come, with massive heatwaves, wildfires and flooding throughout the globe. Unfortunately, the media isn’t connecting these events to climate change and is focusing instead on trade talks and Twitter wars.

The Kinder Morgan pipeline, whichever way you see it, is ample evidence that the issue has become political and polarized. What started as a shrewd gambit – trading a pipeline for a carbon tax – is quickly turning into a quagmire for Justin Trudeau. In a surprising twist, environmentalists are pushing for fiscal accountability and pro-oil activists are asking for greater government intervention. While Canada debates building the infrastructure of the past, other countries are investing in a low-carbon energy economy that will provide the next generation of jobs. For example, India invested $20 billion in renewable energy last year, surpassing the $16 billion they invested in coal, gas and oil plants. China continues to lead, having invested $98 billion in renewables last year compared to $22 billion in coal, gas and oil plants.

Unless the political pendulum swings back (starting with America’s mid-term elections), North America will continue to lose ground as emerging markets leapfrog ahead in developing a green economy.

TOP PICKS

ISHARES MSCI ACWI LOW CARBON TARGET ETF (CRBN.O)

This ETF is a great option for passive investors who want broad diversification with a low carbon footprint. It omits companies with large carbon assets, while skewing the weightings towards companies with lower carbon emissions.

ISHARES GLOBAL WATER INDEX ETF (CWW.TO)

As climate change intensifies, water will continue to be a major issue. Some regions will experience more intense droughts, while other regions can expect major flooding. Either way, investments in water infrastructure will be required.

HANNON ARMSTRONG (HASI.N)

The biggest barrier to green technology adoption is the upfront financial cost. By providing financing solutions to renewable energy, energy efficiency and sustainable infrastructure, Hannon Armstrong is well positioned to profit as we transition to a low-carbon economy.

PAST PICKS: JULY 20, 2018

ISHARES JANTZI SOCIAL INDEX ETF (XEN.TO)

• Then: $26.12
• Now: $25.74
• Return: -1%
• Total return: -1%

INVESCO CLEANTECH ETF (PZD.N)

• Then: $43.15
• Now: $43.84
• Return: 2%
• Total return: 2%

CASCADES (CAS.TO)

• Then: $12.06
• Now: $13.17
• Return: 9%
• Total return: 9%

Total return average: 3%

TWITTER: @timenash
WEBSITE: https://www.goodinvesting.com/
BLOG: https://www.sustainableeconomist.com/