Amid the clean technology and renewable energy booms, investors have been treated to heaping doses of the phrase “green economy.” “Blue economy” could be next on the scene and it’s more than just another investing buzz phrase.
In simple terms, the phrase references the importance of elevated stewardship of global waterways, including oceans. It includes the potentially attractive economic and investment benefits that can be derived from such efforts. The KraneShares Rockefeller Ocean Engagement ETF (KSEA) is among the exchange traded funds that stand out an option for investors looking to tap into the blue economy.
KSEA is just two months old, but age belies the opportunity set. That is to say the blue economy investment thesis is gaining momentum and prominence in the sustainable investing conversation. This indicates that KSEA’s objective, not its age, is what’s most pertinent to end users.
High Potential for the Blue Economy
Investors new to this concept and those evaluating KSEA should consider some of the compelling data points supporting the blue economy investment thesis.
“The Food and Agriculture Organization estimates that blue economy industries assure the livelihoods of 660 to 820 million people worldwide. According to the World Wildlife Fund, the goods and services the ocean provides are worth at least $2.5 trillion per year, which could place the Ocean as the seventh-largest economy in the world,” reported Business Standard.
For values-driven market participants looking for fresh approaches to climate-related and sustainable investing, KSEA also merits attention because oceans are essential in carbon-reduction efforts and meeting sustainable development targets.
“The Blue Economy aligns not only with Sustainable Development Goal (SDG) 14, which focuses on preserving our oceans and marine resources, but goes further, playing a vital role in achieving other SDGs like taking action on climate (SDG 13), ensuring everyone has access to clean water and sanitation (SDG 6), and making affordable, clean energy (SDG 7),” according to Business Standard.
KSEA is pertinent for another reason. It’s not an identical twin of traditional sustainable investing ETFs. That’s because the new ETF isn’t just a green energy or climate change fund in a novel wrapper. Many of KSEA’s 47 holdings hail from the consumer defensive and industrial sectors. These include groups chock full of firms makeing substantial inroads in the blue economy. In fact, those two sectors comprise nearly 60% of the KSEA portfolio.
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