Today, VanEck Global rolled out an ETF that focuses on companies that produce, process and recycle the metals that are used in the transition to a low-carbon economy. The VanEck Green Metals ETF (GMET) holds companies that generate at least half of their revenues from green metals or have the potential to do so based on their green metal mining projects.
The new fund lists on the NYSE Arca and comes with an expense ratio of 0.59%.
GMET’s underlying index includes companies producing metals such as copper, cobalt, lithium, nickel, zinc and rare earths metals, according to Brandon Rakszawski, VanEck’s head of ETF product development. The metals are used in clean energy technology such as wind and solar energy, as well as lithium batteries.
While the methodology of GMET targets green metals, it does not include any ESG screens or requirements, selecting companies solely based on their business activities.
“It's a sustainable investment in the sense that this energy transition just simply can't happen without green metal,” said Rakszawski. “These companies are poised to benefit from that transition.”
The prospectus notes that the fund can invest in foreign securities, including those in emerging markets, as well small- and midcap companies. At launch, GMET’s index had 44 securities, with top holdings including Freeport-McMoran, Glencore and Ganfeng Lithium. China has the largest weighting in the index at 32.2%, more than twice the weight of Australia, the second most heavily weighted country.
Interestingly, at a time when many investors are looking askance at China, the prospectus specifically mentions that the fund can hold A-Shares issued by Chinese companies.
“We very much think that China's critical to the space. It’s such a major player and we want to ensure we're providing comprehensive exposure to this investment thesis in this segment of the market,” Rakszawski said.
VanEck already offers the $1.1 billion VanEck Rare Earth/Strategic Metals ETF (REMX), but Rakszawski describes the overlap as “modest” and estimates that it’s less than 20% of their portfolios.
Contact Heather Bell at [email protected]