Anthony Speciale Stock Market Analyst

Better Way to

WEALTH
MORE MONEY, MORE QUICKLY, MORE SAFELY.
Play Video

How This Fund Can Grow Your Wealth and Help the Community

I’m often accused of being anti-renewable energy because I say that the path to a renewable energy future is not the straight-line path that many would have you believe. That’s simply not the case, as there are so many obstacles between us and a renewable energy future. If we get there by the year 2050, I’ll be shocked.

That’s why you’ve seen us highlight plenty of oil and gas pipeline companies as well as exploration and production companies. We’re not afraid to champion traditional carbon-based energy sources because they’re going to be here for a long time.

And it’s not just me saying that. Even the US Energy Information Agency (EIA) has said that the predominant source of energy in 2050 will probably be oil and gas. In fact, their 30-year projections for oil show demand and supply about even with where it is now.

Of course, natural gas demand is really going to skyrocket going into the future because we have a lot of it here in the US that can be used for electricity and to drive industry.

None of this makes me anti-renewable energy. The fact of the matter is that I love renewable energy, but it will not take the lead for a long time. However, it is going to be the fastest-growing source of energy production in the US and around the entire world.

Now, I’m very price-sensitive, and if I’m not getting a bargain, I’m not interested. Right now, there aren’t many bargains in energy alternative companies, but I can buy carbon-based energy companies at fractions of their asset values and earnings power.

If a renewable opportunity comes along at the right price, I’ve always said I will buy it. And that opportunity is now here!

Ecofin Sustainable and Social Impact Term Fund

The Ecofin Sustainable and Social Impact Term Fund (TEAF) is a pretty cool closed-end fund, and it’s worth taking a position in more income-oriented portfolios. They invest in assets, companies and projects that are going to have a positive impact on the communities that they serve.

About 70% of the money they have invested is in renewable energy infrastructure. They have solar assets across the US, biomass plants, renewable natural gas, publicly traded energy company renewable projects and other assets. 54% is invested in public companies, and 46% of these are loans to private projects and businesses.

In addition to the energy assets, some of their investments are pretty cool, including charging-station operator EVgo, Inc. (EVGO), a biomass plant in North Carolina that produces energy, a bond investment to help fund residential solar company Sunnova Energy International Inc. (NOVA) as well as a charter-school mortgage in in North Carolina. So, this is where the lending gets even cooler, as they’re making investments outside of the renewable energy space that is helping children in the community.

They also made a debt investment in The Cottages Of Perry Hall, which is a senior living facility in Maryland that had come under bad management and hard times. But a new group has taken over, they’re fixing the place up and part of it is going to be funded by this closed-end fund. So, theses direct investments are really cool, and they’re doing some cool stuff for the community.

By the way, they’re not playing politics with their money at all, which I really like. They will lend money for renewable energy projects to traditional energy companies, and they have also lent some money for schools that were run by churches, so they’re not being politically selective. Instead, they’re focusing on getting paid back and helping the community.

So, the Ecofin Sustainable and Social Impact Term Fund gives us some exposure to renewable energy and some feel-better-about-yourself exposure to some cool projects and communities across the US. And with the shares now at a 17% discount to net asset value (NAV) and throwing off a monthly dividend yield of 6.1%, it’s a cool opportunity to be involved in renewable energy at a great price.

We’re going to do well with this fund as we collect dividends and, over time, watch the discount to NAV close. At the same time, it allows you to contribute to doing some good and building some worthwhile projects in communities all across the US.