There are a select number of exchange-traded funds (ETFs) that give exposure to certain sectors, such as green technology.
Other ETFs can give exposure to specific sectors like cybersecurity, video gaming or banking.
The below two ETFs are ones that are all about green technology:
BetaShares Climate Change Innovation ETF (ASX: ERTH)
This investment is about a portfolio of businesses that are aiming to fight climate change. BetaShares says the portfolio “comprises a portfolio of up to 100 leading global companies that derive at least 50% of their revenues from products and services that help to address climate change and other environmental problems through the reduction or avoidance of CO2 emissions.”
The types of sectors that it’s invested in include clean energy, electric vehicles, energy efficiency technologies, energy storage, sustainable food, water efficiency and pollution control.
Some of the names in the portfolio include ones like Eaton, American Water Works, Cie De Saint-Gobain, Trane Technologies, Ecolab, Vestas Wind Systems, Infineon Technologies, Tesla, Samsung and Zoom Video Communications.
It’s a pretty diverse portfolio, geographically speaking. The US is less than half of the country allocation, which is less than most globally-focused ETFs. China, France, Germany, Denmark, the UK, South Korea and Japan all get weightings of more than 3%.
The ERTH ETF has an annual management fee of 0.65%.
ETFS Battery Tech & Lithium ETF (ASX: ACDC)
As the name may suggest, this ETF is about businesses involved in battery technology and lithium mining.
ETFSecurities says that “demand for energy storage is being driven by the movement towards emissions reduction and renewable energy.”
It’s a global portfolio, with around 30 names. Some of the names in there include BYD, Allkem Ltd (ASX: AKE), TDK, Mineral Resources Ltd (ASX: MIN), LG Energy Solution, Renault, Livent and NGK Insulators.
The annual management fee of this ETF is 0.69%.
Battery technology represents a growth investment for many investors given the projected demand for storage in the coming years off the back of growth in renewables use and the electric vehicle industry.
The value chain for battery technology ranges from mining companies, mining for metals like lithium, to manufacturers of battery storage and storage technology providers. All are potential beneficiaries of the anticipated growth in this industry.
I’m not going to say that either of these ETFs is a buy, but I do think that both of them give exposure to two very interesting sectors and megatrends.