The Betashares Climate Change Innovation ETF (ASX: ERTH) made its ASX debut yesterday, opening at $12.72. At the time of writing, ERTH shares have pushed 3.2% higher. This is, in part, thanks to a strong overnight performance in US and European markets.
What’s so special about ERTH?
The ASX ERTH ETF comprises a portfolio of up to 100 leading global companies. These companies derive at least 50% of their revenues from products and services that aim to tackle climate change and other environmental challenges.
Many have pointed to tackling climate change as the next investment megatrend, including leading rare earths producer Lynas Rare Earths Ltd (ASX: LYC). The Lynas share price was one of the best performing ASX 200 shares last year, surging some ~80%. The company sees continued demand for its minerals through areas such as the accelerated demand for electric vehicles, expanding global wind and solar capacity and a growing consumer electronics market.
ERTH aims to provide its investors with exposure to this emerging megatrend where demand for environment-related goods and services is anticipated to rise strongly over the long term.
Investors will be exposed to a broad range of clean solutions including clean/renewable energy, green transportation, water and waste improvements, decarbonisation-enabling solutions and sustainable products.
What companies does ERTH hold?
The ASX ERTH ETF currently holds 90 companies and is heavily US concentrated (42.9%), likely due to the breadth and depth of companies available. The ETF has allocated approximately 60% of its funds into three sectors: capital goods, semiconductors and automobiles.
Its top ten holdings that make up approximately 40.3% of the fund include:
- Trane Technologies PLC (NYSE: TT)
- Infineon Technologies AG (ETR: IFX)
- Zoom Video Communications Inc (NASDAQ: ZM)
- Cie De Saint-Gobain SA
- DocuSign Inc (NASDAQ: DOCU)
- Tesla Inc (NASDAQ: TSLA)
- East Japan Railway Co
- Nio Inc (NYSE: NIO)
- Vestas Wind Systems
- Plug Power Inc
ERTH dodges recent market selloff
The recent tech and growth related selloff may have had a significant impact on the ASX ERTH ETF share price had it listed earlier.
Renewable-related ETFs including the Global X Lithium & Battery Tech ETF (NYSEARCA: LIT), iShares PHLX Semiconductor ETF (NASDAQ: SOX) and Invesco Solar ETF (NYSEARCA: TAN) all slumped around 5%-20% in mid-February before staging a rebound in early-March.
The ERTH ETF has been able to capture the recent rebound. At the time of writing, ERTH shares are up 3.13% to $13.19.