Horizon Kinetics Adds Green-ish Energy ETF
The issuer’s new fund invests in companies involved in less environmentally damaging methods of producing fossil fuels.
On Wednesday, Horizon Kinetics added another actively managed thematic exchange-traded fund to its lineup. The Horizon Kinetics Energy and Remediation ETF (NVIR) takes a pragmatic angle on clean energy by acknowledging that fossil fuels are interwoven with modern life.
Its portfolio targets companies involved in the production of climate or environmentally sensitive carbon-based energy production or that offer products and services that support that production.
NVIR has an expense ratio of 0.85% and lists on the NYSE Arca.
In a presentation document circulated by the issuer, the firm notes the fund is “a broad acknowledgement that carbon-based energy is absolutely necessary for a successful energy transition in the foreseeable future” and “a further recognition that critical technologies exist that can, until other sources are created, remediate the release of carbon into the atmosphere.”
The presentation includes a pie chart indicating that fossil fuels such as petroleum, natural gas and coal represented 79% of U.S primary energy consumption, while renewable energy represents just 12%. It makes the argument that carbon-based energy is necessary for the foreseeable future, though there are technologies that can provide remediation for the release of carbon into the atmosphere.
The Portfolio
NVIR has roughly 40 holdings currently, but will generally hold anywhere from 30 to 50 falling within the energy or remediation categories. That means its portfolio includes a mix of conventional energy companies, along with companies that, through their products and services, are helping to provide clean water; reduce emissions released into the atmosphere; improve the efficiency and limit the environmental impact of fossil fuels; or develop innovations in the hydrocarbons industry, according to the prospectus.
The fund document further notes that the fund uses a value-driven and fundamentals-based investment approach. It can invest in domestic and foreign companies from across the size spectrum.
The presentation suggests the fund could be used to hedge against commodity scarcity. It also posits that hydrocarbons will continue to represent the majority of the world’s energy usage for quite some time, which has not been priced into energy stocks.
Shortly after launch, the fund’s top holdings included EQT Corp., 3.9%; Diamondback Energy Inc., 3.8%; and Cheniere Energy Inc., 3.73%.
Contact Heather Bell at [email protected]
