Penn Wealth Publishing

2021.03.21 Penn Wealth Report Vol 9 Issue 02

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16 penn wealth Report voluMe 9 issue 02 21 Mar 2021 Penn Wealth Report Copyright 2021. All Rights Reserved. investment intelligence Table courtesy of Blue Horizon Capital ETF Spotlight Blue Horizon New Energy ETF e contents of this report reflect the personal views, opinions, and research of Penn Wealth Publishing. While measures are taken to help assure the accuracy of data, no guarantees can be made and the firm is not liable for any losses incurred by subscribers. is is not a solicitation to buy. Always consult your investment professional before investing any money. BNE @ $28 The way in which the world generates, delivers, and uses energy is rapidly changing. While there are no shortage of utility, energy, and infrastructure funds to choose from, one new vehicle—in our opin- ion—embraces the various facets of the new energy environment with efficiency. e Blue Horizon BNE ETF BNE $29 invests in the companies which comprise the Blue Horizon New Energy Economy 100 Index. is index follows a basket of 100 companies which are leaders, enablers, and beneficiaries of a transformational shift in the way energy is produced, stored, distributed, and consumed. We love the fund's vertically-integrated approach, which allows it to invest in all five segments of this dynamic field: e-mobility, energy storage, perfor- mance materials, energy distribution, and energy generation. ese five segments are further broken down into 25 sub-segments, and the 100 or so hold- ings in the fund are selected judiciously from those sub-segments. For example, the top holding in BNE is FuelCell Energy Inc FCEL $18 , a mid-cap electrical equipment and parts manufacturer which designs, makes, sells, installs, operates, and services fuel cell products. Next on the current list of holdings is a mid-cap semiconductor firm: Daqo New Energy Corp DQ $117 . is company makes high-purity polysilicon which it sells to downstream manufacturers who process the substance into ingots, cells, and modules for solar power systems. Buying into any one of these companies individu- ally would require investors to take on some serious beta (risk), so allowing an experienced management team to hand-pick a basket of holdings makes sense for anyone wishing to participate in this exciting field. We also like the geographic and industry exposure offered by BNE. About half of the holdings are US firms, another 30% are spread among Asian coun- tries, and 20% hail from developed Europe. Drilling down to the industry level, about one-quarter of the names are industrials, another quarter are pure technology plays, and the remaining half are basic materials, consumer cyclical, and utili- ties firms. It is still a thematic investment, meaning increased risk, but we are impressed with the team's thoughtful selection and risk mitigation process. We added BNE to the Penn New Frontier Fund (our emerging technologies portfolio) on 26 Feb 2021 @ $28.65 per share. Thematic investments always carry added risk, but we uncov- ered a new fund in an exciting corner of the energy market.

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