The demand for clean, green energy and the inevitable transition away from scarce non-renewable fuels is a global mega-trend offering investment potential.
In an Australian first, investors are now able to invest in an ETF of global companies that are positioned to benefit from this structural shift that has the potential to transform industries, society and the world.
The VanEck Vectors Global Clean Energy ETF, which trades under the ASX ticker ‘CLNE’, will be the only ETF of its kind listed on ASX.
We believe the growth of clean energy is a trend, not a fad. It reflects a long-term structural dynamic and is supported by four long term drivers: Regulatory:It has been estimated nearly US$1.7 trillion of total investment is needed by 2030 to meet government renewable targets1… and that is before you take into account President Joe Biden recently recommitting the US to the Paris Accord.
Societal: A cornerstone of President Biden’s campaign was a commitment to the environment. In the US 80% of consumers aged 18-34 are willing to pay more for electric vehicles (EV)/hybrids2. Globally, it is these consumers that are demanding a shift in the way the world consumes energy.
Economic: The cost of renewable energy has been declining rapidly over the past 10 years. Since 2010, utility-scale solar photovoltaic power has shown the sharpest cost decline at 82%, followed by concentrating solar power at 47%, onshore wind at 39% and offshore wind at 29%3.
Inevitability: Fossil fuels are finite, they will run out. Royal Dutch Shell4and BP5have both indicated that they have passed peak oil production. Alternate energy sources are infinite.
The CLNE opportunity
Long-term growth opportunity An investment in the global energy supply of the future, and the transition to infinite, clean energy away from finite, non-renewable sources.
Targeted exposure Targeted exposure to 30 of the largest global companies involved in the production of clean energy and related technology businesses.
Diversification A diversified portfolio across countries and companies which offers opportunities across a range of subsectors.
1 International Renewable Energy Agency, Untapped potential for climate action: Renewable energy in Nationally Determined Contributions, November 2017. 2 WardsAuto, February 2019, Steven Finlay. 3 International Renewable Energy Agency, Renewable Power Generation Costs in 2019, June 2020. 4 New York Times, Shell, in a Turning Point, Says Its Oil Production Has Peaked, 11 February 2021. 5 BP Energy Outlook 2020, September 2020.
VanEck Investments Limited ACN 146 596 116 AFSL 416755 (‘VanEck’) is the responsible entity and issuer of units in CLNE. This is general advice only, not personal financial advice. It does not take into account any person’s individual objectives, financial situation or needs. Read the PDS and speak with a financial adviser to determine if the fund is appropriate for your circumstances. The PDS is available here.
An investment in the ETF carries risks associated with: ASX trading time differences, financial markets generally, individual company management, industry sectors, foreign currency, emerging markets, country or sector concentration, political, regulatory and tax risks, fund operations, liquidity and tracking an index. See the PDS for details.
The S&P Global Clean Energy Index (“the Index”) is a product of S&P Dow Jones Indices LLC or its affiliates (“SPDJI”) and licensed for use by VanEck. S&P® is a registered trademark of Standard & Poor’s Financial Services LLC (“S&P”); Dow Jones® is a registered trademark of Dow Jones Trademark Holdings LLC (“Dow Jones”); and these trademarks have been licensed for use by SPDJI and sublicensed by VanEck. The Fund is not sponsored, endorsed, sold or promoted by SPDJI, Dow Jones, S&P, or their respective affiliates and none of them makes any representation regarding the advisability of investing in the Fund. Such parties do not accept liability for any errors, omissions, or interruptions of the Index and do not give any assurance that the Fund will accurately track the performance of the index or provide positive investment returns. Inclusion of a security within the index or Fund is not a recommendation by any party to buy, sell, or hold such security.