Clean energy ETFs were given a boost this week after the Democrats became favourites to gain control of the Senate resulting in a clean sweep for the party.

The ‘Blue Wave’ trade was put back on the table after Raphael Warnock secured an upset win in Georgia on 6 January.

This leaves just fellow Democrat Jon Ossoff, who likes likely to win, and vice president Kamala Harris with the remaining votes in the Senate giving the party 51 seats over the Republicans’ 50.

Clean energy ETFs were among the best performing strategies yesterday amid predictions control of both the House of Representatives and the Senate will enable President-elect Joe Biden to push through his $2trn climate-related investment package which was pledged during the US election campaign.

The iShares Global Clean Energy UCITS ETF (INRG) jumped 5.5% on 6 January taking its returns to 17.2% so far this year while the L&G Clean Energy UCITS ETF (RENW), which was launched last November, is up 7.4% year-to-date, as at 7 January.

Clean energy has been one of the most popular trends over the past year with investors piling just under $3bn into INRG in 2020, the fourth highest across all European-listed ETFs.

This can partially be explained by the ETF’s performance which skyrocketed 136% last year driven by the ongoing shift towards a more sustainable economy.

It is thought Biden’s policies are only expected to be a boost to the megatrend. Along with his $2trn climate package, Biden is also pushing towards a carbon-neutral power sector by 2035 and a net-zero economy by 2050.

Laith Khalaf, financial analyst at AJ Bell, said: “The renewable energy theme is one which looks like it has legs, as governments around the world seek cleaner ways to generate power to try to limit climate change.”

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