Rising energy costs could help this disruptive materials ETF


VSumers are feeling the bite of rising energy costs as inflation continues to rattle financial markets. ETF investors, however, have the option of hedging against inflation by betting on the higher costs of renewable energy.

Cost-benefit analysis could prove that despite the rising prices of renewables for materials, the savings from their use could outweigh in the long run. According to a Baron’s articlerenewable power purchase agreements tend towards the long term with agreements lasting at least 10 years, allowing buyers to lock in low rates now before they go up in the long term.

“People actually feel more nervous about what’s going to happen in the state of natural gas and other traditional power generation prices,” said Gia Clark, Senior Director of Developer Services at LevelTen. . “There’s even more confidence that you may be paying a premium now, but over that period you’ll end up being equal or better from a financial standpoint.”

Targeted exposure to disruptive materials

As the cost of materials increases, this could help propel the Global ETF X Disruptive Materials (DMAT) overtime. The fund seeks to provide investment results that generally correspond to the price and yield performance of the Solactive Disruptive Materials Index.

The fund seeks to invest in companies producing metals and other commodities essential to the expansion of disruptive technologies, such as lithium batteries, solar panels, wind turbines, fuel cells, robotics and 3D printers. Targeted materials include companies involved in the exploration, mining, production and/or enhancement of rare earths, zinc, palladium, platinum, nickel, manganese, lithium, graphene, graphite, copper, cobalt and carbon fiber.

Overall, DMAT offers investors:

  • High Growth Potential: Forecasts suggest that the global rare earth element market could more than double between 2020 and 2028 (from $2.2 billion to $5.5 billion), highlighting one of the numerous growth opportunities among the categories in which DMAT invests.
  • Structural Winds: DMAT provides exposure to materials that are critical to fueling disruptive innovations, leading to potentially greener and more efficient transportation, energy, and manufacturing systems.
  • Unconstrained approach: The universe of companies involved in providing disruptive materials defies traditional categorization. DMAT invests accordingly, with global exposure across multiple sectors and industries.

For more news, insights and strategy visit the Thematic investment channel.

Learn more at ETFtrends.com.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


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