Five ETFs Ready to Gain Advantage from the Inflation Reduction Act

By Better Today On May 26, 2024

TL/DR –

The Inflation Reduction Act of 2022, which was recently approved by President Biden, is likely to benefit several Global X ETFs due to its focus on combating climate change. The act offers $370 billion in funding for renewable energy initiatives, including tax credits for wind, solar, hydrogen, and nuclear energy, as well as battery storage. Among the expected beneficiaries are the Global X Lithium & Battery Tech ETF (LIT), the Global X Uranium ETF (URA), and the Global X Renewable Energy Producers ETF (RNRG), which invest in the related industries.

Understanding the Impact of the Inflation Reduction Act on ETFs

In the latest episode of ETF Spotlight, Jon Maier, Chief Investment Officer at Global X, discusses ETFs that could benefit from the Inflation Reduction Act of 2022, recently signed into law by President Biden.

The Act allocates $370 billion to combat climate change, marking it the largest climate spending package in US history. It includes tax credits for wind, solar, hydrogen, nuclear energy, and battery storage.

The Global X Lithium & Battery Tech ETF LIT is set to gain from the increasing demand for silvery-white metal from electric vehicle (EV), renewable energy storage, and mobile device industries. Well-known holdings include Albemarle ALB and Tesla TSLA.

As governments strive towards achieving carbon neutrality and reducing dependence on Russian fossil fuels, nuclear power has regained prominence. The Global X Uranium ETF URA, which invests in uranium mining & nuclear components companies, stands to benefit.

Other ETFs that are likely to see a boost are the Global X Renewable Energy Producers ETF RNRG, which invests in companies harnessing renewable energy sources. The Global X Solar ETF RAYS focuses on solar energy companies, while the Global X CleanTech ETF CTEC invests in companies aiming to reduce environmental impacts.

To learn more, tune into the podcast discussion. For any comments or queries, reach out to podcast@zacks.com.

For the latest recommendations from Zacks Investment Research, download the 7 Best Stocks for the Next 30 Days. Click here for the free report.

Also, check out the free stock analysis reports: Albemarle Corporation (ALB), Tesla, Inc. (TSLA), and various ETF Research Reports such as Global X Lithium & Battery Tech ETF (LIT) and Global X Uranium ETF (URA).

You can read this article on Zacks.com.