The world of construction is experiencing its own renaissance of sorts — along with increased technology to make current operations more efficient, there’s also an environmental, social, and governance (ESG) component added into the mix. This opens up opportunities for a pair of exchange traded funds (ETFs) to consider.
ESG has been an obvious hot topic over the last few years as more companies have looked to integrate its principles in their core business operations. With the respect to the capital markets, more investors are looking for an ESG component in their portfolios, and in the case of construction, green buildings are a growing trend.
“Sustainability has been a defining trend of the last decade, and we expect it to continue to be a significant focus in 2023 — especially in construction,” a PR News blog noted. “There is already a growing demand for environmentally friendly, green building materials. These materials, made from sustainable and renewable resources, have a low impact on the environment throughout their lifecycle.”
Governments around the world are also quick to identify this trend. As such, more regulatory measures will be in place to promote the use of building materials that focus on sustainability.
“Alongside consumer demand, there’s also increasing pressure from governments and regulatory bodies to promote sustainability,” the blog added. “Many countries have implemented policies and regulations that encourage or require using sustainable building materials in new construction and renovations.”
2 ETFs to Invest in the Green Building Trend
The ETF universe has grown to a point that when innovation occurs, there’s usually a fund to play an opportunity. In the case of more governments mandating the use of sustainability materials, one ETF to consider is the Invesco S&P 500 Equal Weight Materials ETF (RTM).
This ETF offers exposure to equities included in the S&P 500 Materials Index, which covers the following industries: chemicals, construction materials, containers and packaging, metals and mining, and paper and forest products.
As mentioned, ESG continues to be a hot topics in the investment world, so investors may want to consider the Invesco ESG S&P 500 Equal Weight ETF (RSPE). As its name suggests, RSPE is based on the S&P 500 Equal Weight ESG Leaders Select Index — the equal-weight component prevents an overconcentration in stocks for better portfolio balance.
RSPE’s underlying index is designed to measure the equal-weighted performance of securities included in the S&P 500 Equal Weight Index. The obvious discernment is the inclusion of ESG criteria, while also maintaining similar overall industry group weights.
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