Combat Volatility and Climate Change with Non-Correlated Assets

By Ryan Dings

Non-correlated assets can be useful tool in a time of market volatility. Simply put, a non-correlated asset is one that is not tied to the swings of the stock market; it can provide a consistent income stream whether the market goes up or down. Thus, a downturn in the stock market would not directly impact the returns from a non-correlated asset, making it a fantastic way to diversify your portfolio in a time when the future of the stock market is increasingly uncertain.

At Sunwealth, we offer two ways to invest in our Solar Impact Fund, a diverse pool of commercial solar projects (i.e., non-correlated assets) that target meaningful returns and measurable impact through the upward and downward swings of the public markets:

  • Our Bond product targets a consistent, quarterly return of principal and interest over a ten-year term, giving investors a predictable stream of cash flow and the opportunity to re-invest the returned principal into future bond offerings, and
  • Our Tax Equity product aims to distribute tax benefits (in the form of credits and deductions) and cash to investors, targeting a rapid return of tax benefits so investors can address tax liability in the year they invest, followed by cash distributions each year of the holding period. 

When our investors select our bond or tax equity product (or both), they are investing in high-performing commercial solar projects owned and managed by Sunwealth. These portfolios generate revenue by selling solar power to credit-worthy purchasers, and that revenue forms the basis of the returns we target for our investors. 

Whether the stock market goes up or down, our systems produce power and our power purchasers buy it.  Certainly, investing with solar is not without risk.  But, our ability to deliver returns to our investors is not correlated to the public markets. The outcome of an investment in our Solar Impact Fund is independent of market outcomes.  Given the volatility we’re experiencing every day in the stock market, non-correlated assets can be a useful hedge against such volatility, in addition to a meaningful way to combat climate change and strengthen the resiliency of communities.  Whoever said non-correlated assets couldn’t be exciting has clearly never met the Sunwealth team!

Ryan Dings