Sustainable investing is a broad term that encompasses more than some novice investors realize. Under that umbrella are water-related issues, including both drinking water and ocean investing.
The IQ Clean Oceans ETF (OCEN) is the leading idea among exchange traded funds focusing on ocean investing. While OCEN and ocean investing more broadly aren’t yet generating buzz on par with other sustainable concepts, the fund is relevant because it represents a crucial economic segment.
“Globally, the market value of marine and coastal resources and industries, is estimated at USD 3 trillion per year or about 5% of global GDP,” according to Credit Suisse.
With numbers like that, depth is important. OCEN, which tracks the IQ Clean Oceans Index, answers that call. A roster of 80 stocks is sizable for a thematic fund with a focus as narrow as OCEN’s, indicating that the ETF has the ability to efficiently synthesize a sprawling investment concept.
“Thanks to innovative companies, lots of new products and services will help address the challenges of the world’s oceans,” added Credit Suisse.
Enhancing the allure of OCEN and perhaps ocean investing at large is increasing emphasis on UN Sustainable Development Goal (SDG) investing. As more asset allocators adhere to SDG priorities, blue investing could join its green counterpart in the sustainable investing lexicon.
“With the growing global population, the unavoidable energy transition, and necessary change in dietary habits, our reliance on the oceans is set to increase. Sustainable, forward-looking management of the oceans will foster the blue economy today and secure this key resource for the future,” noted Credit Suisse.
Like other parts of the sustainable investing realm, ensuring oceans and marine life are positioned to survive and thrive amid the effects of climate change will require significant spending across myriad industries. OCEN meets that demand with exposure to six sectors. That includes a combined 43.6% weight to technology and industrial stocks, which is practical with regards to ocean investing. Additionally, OCEN, as ocean investing, could be a credible avenue to thematic growth investing.
“For reference, the population of the United States is currently about 330 million. Just in the United States in 2018, the blue economy grew faster than that of the rest of the country, adding $373 billion to the national GDP and supporting 2.3 million jobs,” noted the Ocean Conservancy.
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The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.