Doug Goodwille from Kayne Anderson speaks to Drew Meredith from The Inside Network on market thinkers.
While a surging gold price is on hold as the world adjusts to a Trump presidency, all the factors that saw its price rise more than 50 per during his first term in office – trade disputes, fiscal deficits and geopolitical tensions – are almost certainly guaranteed the second time around.
Betashares Solar and Uranium ETFs, VanEck unveils carbon credits strategy
Australia’s largest ETF provider, Betashares, has launched two new products designed to take advantage of the move to decarbonisation and renewable energy – BetaShares Solar ETF (ASX:TANN) and BetaShares Global Uranium ETF (ASX:URNM).
The move comes just days after ETF competitor VanEck, announced it would launch a carbon credits ETF. The ETF will track the four most actively traded and largest carbon markets and emissions trading schemes (ETS) in the world – The ICE Global Carbon Future Index which sources carbon credit future prices from the European Union Emissions Trading Scheme, the Western Climate Initiative (California Cap and Trade Program), the Regional Greenhouse Gas Initiative (RGGI), and the UK Emissions Trading Scheme. The ETF will trade under ticker code ASX:XCO2.
In a similar fashion, the Betashares Solar will provide exposure to leading global companies involved in the solar energy industry, including solar panel manufacturers, inverter suppliers, installers, manufacturers of solar-powered charging and energy storage systems, and providers of solar project finance. The Global Uranium ETF will provide exposure to a portfolio of global companies involved in the mining, exploration, development and production of uranium, modern nuclear energy, or companies that hold physical uranium or uranium royalties.
While uranium used in nuclear energy power generation is often thought of as a dangerous way to produce energy, it couldn’t be farther from the truth. Despite public concerns, data clearly shows that nuclear power is a much safer energy source than fossil fuels. In fact, it is one of the safest energy sources that are also clean and reliable. Contrary to popular belief, fossil fuels kill many more lives than nuclear energy. Unfortunately, the public opinion on nuclear energy tends to be very negative, because of Chornobyl and Fukushima.
According to the Australian Renewable Energy Agency, At the end of 2020, there was more than 700 GW of solar installed around the world, meeting around 3 percent of global electricity demand. Solar photovoltaics is the fastest-growing electricity source. In 2020, around 139 GW of global capacity was added, bringing the total to about 760 GW and producing almost 3 percent of the world’s electricity. Under International Energy Agency (IEA) modelling, solar energy is projected to grow from ~3% of total electricity production in 2020 to ~30% by 2050 in order to meet emission reduction goals under the Paris Agreement on Climate Change. The same modelling projects that the energy created from nuclear power would ideally need to double by 2050 – from 400GW per year to
800GW – to be consistent with a net-zero carbon emissions target.
The launch of three new Green ETFs, each offering an opportunity to invest in a niche and targeted segment of the market, reflects a world that is well on its way to decarbonisation. First, it was ESG investing and cutting out carbon emitters, the next step is to fund green energy developments across the globe.
