Alternative Investments/ESG: VanEck Targets Energy Transition, Launches New Green Metals ETF
The Green Metals ETF provides exposure to the producers, refiners, processors and recyclers of ‘green metals’ that would be essential for a low carbon economy.
VanEck launched Thursday a new ETF focused on ‘green metals.’ The VanEck Green Metals ETF (NYSEARCA: GMET) will invest in companies whose businesses focus on metals including copper, cobalt, lithium, nickel, zinc and rare earths metals, which are essential for clean energy technology as well as lithium batteries. (ETF Express)
VanEck Green Metals ETF (NYSEARCA: GMET)
“New technologies, from electric vehicles to offshore wind farms, cannot function without green metals such as lithium, copper, zinc and manganese. As governments around the world mandate and consumers embrace these shifts to lower carbon approaches, demand for these metals is only expected to increase,” says Brandon Rakszawski, Senior ETF Product Manager with VanEck. “We’re very pleased to be introducing GMET, a powerful new tool for investors looking to add global exposure to the leading and emerging companies driving the supply of green metals.”
According to statistics from the IEA as of 2020, 29% of the demand for lithium was driven by clean energy efforts, and this could go up to 92% by 2040. Similar projections show that clean energy demand for cobalt is expected to rise from 15% to 69%; while clean energy demand for nickel is expected to increase from 8% to 61%.
Prices of these metals are likely to be further boosted in an environment of supply deficits, mining project execution delays and lower quality of ore deposits.
“Those trends are key to note, but the green metals story is not just one of supply and demand,” added Rakszawski. “In the transition to a low carbon economy, we are poised to see a shift in geographic influence as countries like China, Chile and the Democratic Republic of Congo are well positioned to influence the global supply of green metals, making a global approach to this category essential for investors.”
Notably the fund may also invest in Chinese A-shares.
The new ETF will track the MVIS Global Clean-Tech Metals Index (MVGMETTR), a rules-based index offering exposure to companies involved in the production, refining, processing and recycling of metals used in applications, products and processes that enable the energy transition.
Previously, VanEck launched the VanEck Environmental Sustainability Fund (ENVIX) and the VanEck Rare Earth/Strategic Metals ETF (REMX).
The ETF has a net expense ratio of 0.59%.
Related Story: VanEck Launches Sustainable Muni ETF
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