Harvest debuts Canada’s first clean energy and travel & leisure ETFs

Jan 18th, 2021 | By | Category: Equities

Harvest Portfolios has launched Canada’s first ETFs providing exposure to clean energy and travel & leisure investment themes.

Michael Kovacs, President and CEO of Harvest Portfolios Group

Michael Kovacs, President and CEO of Harvest Portfolios.

The Harvest Clean Energy ETF (HCLN CN) and Harvest Travel & Leisure Index ETF (TRVL CN) have listed on the Toronto Stock Exchange.

Each comes with a management fee of 0.40%.

Clean energy

The Harvest Clean Energy ETF follows a rules-based investment approach whereby the fund invests in an equally weighted portfolio of the 40 largest clean energy companies listed in developed markets globally. American Depository Receipts of emerging market firms are also eligible for inclusion. The portfolio is reconstituted and rebalanced on a semi-annual basis.

Half (50%) of the portfolio is currently allocated to renewable energy producers while the ETF also provides exposure to developers of solar equipment (27%), hydrogen & fuel cell equipment (12%), battery & energy storage equipment (5%), and wind power equipment (5%).

Stocks from the US account for approximately one-third (30%) of the portfolio with the next largest country exposures being China (14%), Canada (12%), New Zealand (9%), and Spain (9%).

Michael Kovacs, President and CEO of Harvest Portfolios, commented: “We are very excited to launch this unique and low-cost clean energy ETF in Canada. This is an exciting and growing space, an area that is getting the proper political and societal attention it needs as more Canadians look to environmental factors when investing. There are large sources of government and private capital flowing into this space at unprecedented levels which we see continuing to grow into the future. With the changes going on in energy generation, the future is definitely clean.”

Travel & leisure

The Harvest Travel & Leisure Index ETF is linked to the Solactive Travel & Leisure Index, consisting of the 30 largest North American companies generating at least half of their revenue from industries related to travel and leisure.

Constituents are weighted by float-adjusted market capitalization subject to a cap of 10% on any single stock. The index is reconstituted and rebalanced on a semi-annual basis.

The fund’s largest sector exposures are hotels, resorts, and cruises (30%), airlines (26%), casinos & gaming (22%), internet & direct marketing retail (13%), and hotel & resort REITs (6%).

Notable positions include Marriott International (9.4%), Booking (8.7%), Hilton Worldwide (7.9%), Southwest Airlines (7.8%), and Delta Air Lines (7.4%).

Kovacs commented: “TRVL is another first for Harvest in Canada and will provide investors with access to some of the most prominent travel and leisure companies in the world. TRVL provides a low-cost portfolio that stands to benefit from a rebound in international travel as the global economy recovers, as well as a demographic trend that was well established prior to the recent Industry shutdowns.”

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