Top 5 Stocks, 3 Hedge Funds And 3 ETFs For The Hydrogen Economy
Combating climate change is on the core agenda of President Biden. On his first day, he addressed this issue by rejoining the Paris Climate Agreement, ending the Keystone XL pipeline and revoking oil and gas development at national wildlife monuments [1]. As climate change has such a priority in Biden’s agenda, it has brought attention to the high growth hydrogen economy.
Hydrogen Economy is the process of producing hydrogen to use it as fuel, hence replacing fossil fuels and cutting carbon emission significantly [2]. Companies that operate under the Hydrogen Economy are the companies that sell fuel cells, renewable energy equipment, and supply hydrogen gas. The stocks of these companies have been soaring – driven not only by President’s Biden support for clean energy, but also by 60 countries agreeing to reduce their net carbon emissions by 2050 [3], as well as by the rising adaptation of zero-emission.
Using AlternativeSoft’s asset selection tool we were able to find top performing hedge funds across multiple strategies to see how they performed vs hydrogen stocks and ETFs.
The top 5 Hydrogen stocks, Ballard Power Systems (BLDP), Cummins (CMI), Plug Power (PLUG), Bloom Energy (BE) and FuelCell Energy (FCEL), had very impressive cumulative returns in 2020. PLUG had the highest return at 1560%, starting the year at $3.87 and ending it at $64.25. FCEL comes as a second with a return of 1247%, followed by BE’s return of 385%, BLDP 269% and, CMI 50%. What has also boosted this increase, is the falling costs and rising capital coming in the industry not just in the United States but globally. In the beginning of January this year, Plug Power got a $1.5 billion investment from SK Holdings [4].
Figure 1: Hydrogen Equities Cumulative Returns Jan 20 – Jan 21
Hydrogen-related ETFs also had impressive cumulative returns during 2020. The First Trust NASDAQ® Clean Edge® Green Energy Index Fund had total returns of 222%, the SPDR® Kensho Clean Power ETF of 189% and Invesco DWA Industrials Momentum of 42%.
Figure 2: Hydrogen Related ETFs Cumulative Returns Jan 20 – Jan 21
Hedge funds funds with highest cumulative returns in the Eurekahedge Database (excluding bitcoin), were Delphi Global, Gammon Tailwind Fund and CIF Cayman Fund SPC – Chaos Alpha Fund SP. The Gammon Tailwind Fund had total accumulative return of 730%, followed by CIF Cayman Fund SPC – Chaos Alpha Fund SP at 590% and Delphi Global at 412%.
Figure 3: Top Hedge Fund Returns Dec 19 – Dec 20
N.B. This article is not intended to provide any professional investment advice and should be treated as more of an opinion piece.
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[1] Erickson, B. (2021, January 21). Biden signs executive actions on COVID, climate change, immigration and more. Retrieved from https://www.cbsnews.com/news/biden-signs-executive-orders-day-one/
[2] Bloom, SunPower, Cummins: Hydrogen Economy Stocks To Watch As Biden Administration Takes Over. (2021, January 21). Retrieved from https://www.forbes.com/sites/greatspeculations/2021/01/21/bloom-sunpower-cummins-hydrogen-economy-stocks-to-watch-as-biden-administration-takes-over/?sh=7c28d846b55e
[3] Sengupta, S., & Popovich, N. (2019, September 25). More Than 60 Countries Say They’ll Zero Out Carbon Emissions. The Catch? They’re Not the Big Emitters. Retrieved January 22, 2021, from https://www.nytimes.com/interactive/2019/09/25/climate/un-net-zero-emissions.html
[4] Plug Power and South Korean SK Group to Form a Strategic Partnership to Accelerate Hydrogen Economy Expansion in Asian Markets; Plug Power to Receive $1.5 Billion Strategic Investment From SK Group. (2021, January 6). Retrieved January 22, 2021, from https://www.ir.plugpower.com/Press-Releases/Press-Release-Details/2021/Plug-Power-and-South-Korean-SK-Group-to-Form-a-Strategic-Partnership-to-Accelerate-Hydrogen-Economy-Expansion-in-Asian-Markets-Plug-Power-to-Receive-1.5-Billion-Strategic-Investment-From-SK-Group/default.aspx
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