The Russian war in Ukraine will have severe implications on the shape and pace of the energy transition globally, according to the World Economic Forum.
Governments, corporates, and consumers are aligned in driving a global sustainability revolution, but the scale of the challenge is so large that a holistic approach is necessary, with solutions to reduce greenhouse gas emissions required across many different activities, according to Goldman Sachs.
The green revolution may present a unique wealth creation opportunity for investors over the next decade, and the Goldman Sachs Future Planet Equity ETF (GSFP) is well-placed to outperform over the long term by investing in companies that are enabling the climate transition.
GSFP actively selects global companies focusing on key themes that address environmental concerns. Constituents are selected based on a fundamental approach identified by companies’ key theme-driven revenue, value, and growth, combined with the fund advisors’ research and forecasts based on company disclosures, third-party research, and other subjective criteria, according to VettaFi.
The fund currently includes five key themes: clean energy (solar and wind energy, bioenergy, energy storage, grid services, and carbon sequestration); resource efficiency (electric and autonomous vehicles, sustainable manufacturing, logistics, and smart cities); sustainable consumption (agriculture, food, tourism, and fashion); circular economy (recycling and reuse, waste management, and single-use substitution); and water sustainability (water treatment, distribution, and desalination), according to VettaFi.
The fund offers global exposure to companies engaged in the energy transition. Looking at the regional allocation, the top country weights include the U.S. (40.1%), Japan (9.9%), Denmark (6.1%), the Netherlands (4.6%), and Italy (4.2%), as of May 23, according to the firm’s website.
The fund’s top holdings as of May 23 include Enel SpA (4.2%), Iberdrola SA (4.1%), Neste Oyj (3.8%), Ecolab Inc. (3.6%), Danaher Corp (3.5%), NextEra Energy Inc. (3.4%), Schneider Electric SE (2.8%), Infineon Technologies AG (2.8%), Koninklijke DSM NV (2.7%), and Albemarle Corp. (2.7%), according to the firm’s website.
The fund charges a 75 basis point expense ratio.
For more news, information, and strategy, visit the Future ETFs Channel.