Alternative Investments/ESG: Global X Launches Green Metals ETF In Australia

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Green metals are those that are required for the energy transition, namely lithium, copper, nickel, rare earths and cobalt.

Global X ETFs Australia, which is a part of international investment manager Mirae Asset Financial, has launched the Global X Green Metal Miners ETF (ASX: GMTL). The new ETF provides investors with exposure to international companies producing critical metals for clean energy infrastructure and technologies, including lithium, copper, nickel, rare earths and cobalt. These are all minerals used extensively in the production, transmission and storage of renewable energy, and which will be instrumental in worldwide efforts to fight global warming as governments and companies alike strive to reach net-zero carbon emissions by 2050. (Finder.au)

Global X Green Metal Miners ETF (ASX: GMTL)

The new ETF will track the BITA Global Green Energy Metals Index, which includes companies that earn more than 50% of their revenue from mining or producing green metals.

If all climate pledges are honoured, demand for clean energy technologies backed by green metals could quadruple by 2040, according to the International Energy Agency. Revenue from green metal mining and production is set to outpace coal well before 2040.

There is therefore a growing investment opportunity in the mining industry as the world embraces clean energy. In fact, building clean energy technology – such as electric cars, offshore wind turbines and solar farms – requires far more metal than fossil fuel alternatives.

Due to potential imbalances in the demand and supply of these critical metals, it is the view of Global X that mining companies of energy transition metals could likely enjoy much higher valuations in future.

The ETF also includes an ESG screen that excludes businesses which do not meet sustainability standards. It charges an annual management fee of 0.69%.

Fundspeak

“Demand for green metals is soaring around the globe and promises to intensify as climate change initiatives become more ambitious,” Global X head of investment strategy Blair Hannon said. “The investment opportunity lies in the market dislocation of critical minerals over the medium to longer term – with demand set to outpace supply and spark higher commodity prices.”

Related Story: Thematic ETF From Global X Targets Disruptive Materials

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