Invest in global clean energy and technology companies.

VanEck is in the final stages of prepping the  Vectors Global Clean Energy ETF (ASX: CLNE) for launch on the Australian Securities Exchange (ASX) in the ensuing weeks. The ETF will focus on the clean energy sector, expected to benefit from President Biden’s commitment to the climate agreement. (FS Sustainability)

Vectors Global Clean Energy ETF (ASX: CLNE) from VanEck

The new ETF will track the S&P Global Clean Energy Index. This index has delivered a total return of 116% over the last 12 months as of end-January.

The ETF offers investors the opportunity to invest in the largest global companies with low carbon footprints involved in clean energy production. These could also be businesses that produce technology related to clean energy production, from both developed and emerging markets.

These companies are best positioned to benefit from a structural shift away from scarce non-renewable fuels to clean, green energy.

This transition could take the shape of a global mega-trend offering a lucrative investment opportunity.

The size of the market

According to VanEck, power generation coming from renewable sources, such as wind, solar, hydro, and geothermal, should provide almost half of the world’s electricity generation by 2050, per US Energy Information Administration (EIA) forecasts.

The Paris Climate Agreement targets to achieve a climate-neutral world by 2050. Further, it seeks to cap the rise in global average temperature to below 2C above pre-industrial levels.

“US President Joe Biden has brought renewed hope that the world will work harder to meet the Paris climate agreement, to which the US has re-committed,” said Arian Neiron, managing director and head of Asia Pacific, VanEck. “Biden has promised to spend US$2 trillion on clean energy projects over the next four years. Elsewhere around the globe, money is pouring into the sector to invest in renewable energy projects.”

Furthermore, “investors are demanding action on climate change and increasingly they are demanding investment products that facilitate a lower carbon future,” added Neiron. “CLNE responds to this need.”

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