Element Funds, a new investment firm providing access to the critical metal inputs at the core of the renewable economy, launched its inaugural exchange traded fund, the Element EV, Solar & Battery Materials (Lithium, Nickel, Copper, Cobalt) Futures Strategy ETF (NYSE Arca: CHRG). The ETF will provide actively managed exposure to the core commodities essential to the production of electric vehicles (EVs), battery energy storage systems (BESS), and other renewable infrastructure.
CHRG will reflect industry demand for the key metals, and will invest in financial instruments linked to lithium, nickel, copper, and cobalt. Element co-founders John Raymond and John Calvert, principals at the natural resources-focused private equity firm, The Energy & Minerals Group (EMG), will manage the fund.
Through 2030, an estimated $1.2 trillion is expected to be spent to both develop and produce electric vehicles alone, from mining and refining the raw materials, to manufacturing the batteries. The global economy is projected to require more than 200 new mines and plants over the next decade to supply the raw materials needed for this massive energy expansion.
CHRG will provide investors of all classes with institutional-quality exposure to the futures contracts of commodities — such as lithium, cobalt, nickel, and copper — key to the shift to a net-zero carbon renewable economy.
By directly accessing the futures of the elements crucial to EV and BESS technology, CHRG will not be beholden to stock price fluctuations based on factors unrelated to the demand of the underlying metals. This will prevent investors from being hampered by company-specific factors such as political, permitting, construction, operations, balance sheet, and management risks. Plus, CHRG being actively managed will help navigate the changing nature of technology in the renewable energy sector.
“Over the past several years, we’ve seen enormous investor demand in strategies linked to the EV and renewables revolution,” said William McDonough, CEO and co-founder of Element Funds, in a news release. “However, critical metals are not an investment that you can set and forget. We will utilize our global experience to continuously monitor and re-evaluate CHRG’s portfolio allocations and weighting based on real-time industry developments.”
Raymond, CEO of EMG, added: “In the decades of experience that we have accumulated managing private market strategies in this space, we have become acutely aware of the necessity of an active approach to investing in the raw materials at the foundation of the renewable energy economy. Our experience confirms that accessing these specific metals requires a deep knowledge in the exploration, mining, processing, and end-use application lifecycle, and we’re excited to bring investors a means of accessing this market.”