ETFs to Track a Shift Away from Crude Oil and into Cleaner Energy

Investment banks are bolstering their ranks with teams to gauge the rise of businesses and economies that benefit from going green. One way for exchange traded fund investors to also get in on the shift in energy demand is through new battery-related segments.

“As we move toward a decarbonized economy these businesses realize they need to be involved in electricity,” Jonathan Funnell at recruiters Proco Commodities, told Reuters. “Oil (revenues) being so bad has brought this to the forefront.”

According to recruitment consultants, investment banks are bolstering their trading teams in markets like gas, metals and carbon permits, which have come at the expense of oil trading teams as the market has fallen out of favor.

Headhunters now pointed out that investment banks see areas like metals, which are essential components of batteries and for electrifying transportation systems, as a better bet.

ETF investors can also gain exposure to this growing segment as economies go green and advanced technologies increasingly rely on more rare earth metals.

For instance, the Global X Lithium & Battery Tech ETF (NYSEArca: LIT) tracks the full lithium cycle from mining and refining through battery production. Additionally, the includes companies engaged in the mining, exploration, production, development, processing or recycling of the metals and materials being utilized in advanced battery technologies, such as Lithium, Cobalt, Nickel, Manganese and Graphite.

ETF investors can also consider something like the VanEck Vectors Rare Earth/Strategic Metals ETF (REMX) as a way to gain exposure to the rising demand for rare earth metals. The fund track the overall performance of companies involved in producing, refining, and recycling of rare earth and strategic metals and minerals. REMX offers investors the opportunity to participate in the rare earth metals arena, without as much of the risk presented when investing in an individual rare earth miner.

For more information on the materials space, visit our basic materials category.