VanEck Taps Green Infrastructure With New ETF

October 20, 2022

VanEck Associates Corp. announced the launch of a new green infrastructure exchange-traded fund Thursday, marking the New York-based investment manager’s latest venture into sustainable investing. 

The VanEck Green Infrastructure ETF (RNEW) aims to invest at least 80% of its assets in companies that seek to positively impact the environment and support the creation of infrastructure that uses green energy. 

RNEW will track the Indxx US Green Infrastructure-MCAP Weighted Index, which provides exposure to U.S.-based companies that generate at least 50% of their revenue from sustainable infrastructure activities or that are involved in the production or distribution of green energy.  

The ETF lists on the Nasdaq and has an expense ratio of 0.45%, which is comparable to fees charged by competing funds such as the JPMorgan Sustainable Infrastructure ETF (BLLD) and the First Trust NASDAQ Clean Edge Smart Grid Infrastructure Index Fund (GRID) with expense ratios of 0.49% and 0.63%, respectively. 

“There are quite a few competitors around focused on traditional infrastructure, mainly focused on sectors like industrials, utilities, materials, etc. However, there is a lack of funds focused on a more sustainable set of subindustries,” VanEck Associate Product Manager Nick Frasse wrote in an email. 

Frasse said RNEW will provide a diversification opportunity to investors who have allocated money into the traditional “bridges and roads” style infrastructure, as well as those who are looking to dip into the sustainable investing space. 

The demand for sustainable and environmentally friendly investing is soaring, with investors seeking products to boost portfolio values and diversify assets. A recent study conducted by PwC found that growth in sustainable investing—especially with environmental, social and governance-oriented funds—is expected to outpace the asset and wealth management market as a whole.  

The report also suggested sustainable products to be lucrative investments, with 60% of surveyed investors reporting that ESG has already resulted in higher yields in their investment performance, compared with non-ESG equivalents. 

“When assessing a competitive landscape, it’s one of our top priorities that [this] potential product focus on areas of the market we believe to be long-term trends,” Frasse added. 

 

Contact Zoya Mirza at [email protected] 

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