Thursday has brought the first ETF focused on exposure to a more ESG-based economy. Direxion officially announced the recent launch of the Direxion World Without Waste ETF (WWOW). WWOW invests in 50 companies at the forefront of the move to a circular economy from a linear one.

Until recently, the ‘take-make-consume-waste’ of resources within a linear economy has prevailed. Raw material transformed into a product, and after its utility was over, its lifecycle ended, and it became waste. Alternatively, the regenerative framework provided by a circular economy affords companies the ability to address environmental and sustainability priorities, drive innovation, and push for competitiveness while generating growth.

“Investors have embraced ETFs with exposure to renewable and alternative sources of energy, but a circular economy encapsulates a far broader range of companies,” said David Mazza, Managing Director at Direxion. “WWOW is the first US-listed fund providing direct exposure to companies helping to make a world without waste.”

WWOW seeks investment results, before fees and expenses, which track the Indxx US Circular Economy Index. The Indxx US Circular Economy Index tracks the performance of 50 US-listed companies that are representative of the transformative shift from the linear model of the economy to a circular one. The index includes five sub-themes central to the circular economy, providing investors access to the shifting paradigm in growing segments such as biofuels, solar power, and waste management, along with collaboration and content sharing platforms. The top 10 companies from each sub-theme, by largest total market capitalization, will form the final index.

The Five Sub-Themes Are:

  • Sustainability of Resources: Provide renewable energy – bio-based or fully recyclable input material – to replace single-lifecycle inputs.
  • Resource Recovery: Recover useful resources and energy from disposed of products or byproducts.
  • Life Cycle Extension: Extend the working lifecycle of products and components by repairing, upgrading, and reselling.
  • Sharing Platforms: Enable the increased utilization rate of products through shared access, ownership, and use.
  • Product as a Service: Offer product access, and retain ownership, to internalize the benefits of circular resource productivity.

The top holdings in the Indxx US Circular Economy Index represent large, mid, and small cap firms across a mix of unique sub-industries representative of a world without waste. Many of the holdings focus on the Information Technology sector, with further exposure to the Communication Services, Consumer Discretionary, and Industrials sectors.

Ticker

Name

 Circular Economy Sub-theme

Total Market
Cap ($M)

Weight (%)

JMIA

Jumia Technologies AG

Life Cycle Extension

$3,593.21

8.39%

ENPH

Enphase Energy Inc

Sustainability of Resources

$22,167.58

6.94%

TSLA

Tesla Inc

Sustainability of Resources

$668,905.11

6.76%

ETSY

Etsy Inc

Life Cycle Extension

$22,432.84

4.55%

SNAP

Snap Inc

Sharing Platforms

$74,603.33

3.40%

MELI

MercadoLibre Inc

Life Cycle Extension

$83,386.78

3.15%

SHOP

Shopify Inc

Sharing Platforms

$138,093.33

3.03%

SPOT

Spotify Technology SA

Sharing Platforms

$59,655.18

2.78%

FSLR

First Solar Inc

Sustainability of Resources

$10,483.16

2.49%

OKTA

Okta Inc

Product as a Service

$32,918.05

2.48%

Source: Source: Bloomberg Finance, L.P., Indxx, as of 12.31.2020.

For more information, please visit www.direxion.com.

For more market trends, visit ETF Trends.