Covering 70% of the earth’s surface, oceans are vast. So is the related ocean investment opportunity. It’s one that could garner increased attention as more investors look for unique ways to tap into sustainable investment themes.
However, stock-picking to the blue/ocean economy effect isn’t any easier than it is in other market segments. So the KraneShares Rockefeller Ocean Engagement ETF (KSEA) could be a valid 2024 consideration for investors. The actively managed ETF debuted last September with ocean-related focus relative to the MSCI All Country World Index.
KSEA is subadvised by Rockefeller Asset Management, a unit of Rockefeller Capital Management. That’s an important fact, because the money manager has long-standing relationships germane to KSEA’s thesis. Those relationshps include entities such as the Ocean Foundation and World Resources Institute. But more important to investors considering KSEA is the sheer expanse of the ocean economy opportunity set.
Ocean Engagement ETF KSEA Could Sail High Seas
The blue economy has been overshadowed for years by its green counterpart. But that anonymity should be a thing of the past. Basic data confirms as much and highlights attractive long-term potential for assets such as KSEA.
“The ocean covers 70% of the earth’s surface, making ocean health imperative for the stability of the earth and longevity of global biodiversity. Economic value derived from the ocean’s goods and services is estimated to be $282 billion in the U.S. alone, with three million people working in ocean sectors,” according to whitepaper published by Rockefeller Capital Management.
That’s just one data point, but it confirms the breadth of the ocean economy set. That depth is potentially advantageous. But it also implies investors could be better served by broader strategies such as KSEA. Additional signs indicate as much.
Diverse Universe of Industries
“We view the blue economy to encompass a wide array of industries that have direct and indirect links to the ocean. It is a diverse universe of industries and companies that range from marine transportation, port infrastructure, offshore renewable energy, the global seafood complex, and even companies that have a role to play in developing the circular economy,” added Rockefeller.
KSEA’s status as an actively managed fund could prove beneficial. That’s because active management can dampen greenwashing and valuation risks while ensuring purity to the stated investment thesis.
“We believe that organizations that are improving their ESG practices will experience stronger financial returns over the long term and incorporating engagement into the investment process can lead to share price outperformance over the long term,” concluded Rockefeller. “That is because engagement focuses on areas of improvement that have a strong business case and make sense from a financial perspective. Our approach goes beyond just selecting companies that are ocean leaders and solutions.”
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