Newly minted Strive Asset Management has debuted its first ETF with the introduction of a fund targeting stocks across the US energy sector
Vivek Ramaswamy, co-Founder and Executive Chairman at Strive Asset Management.
The Strive US Energy ETF (DRLL US) has been listed on NYSE Arca with an expense ratio of 0.41%.
While energy stocks are up around 30% year-to-date, far outperforming the broader US equity market, Strive believes the segment could still appreciate multi-fold over the next two years as the easing of lockdown policies in China and elsewhere, combined with the upcoming EU ban on Russian oil, causes a dramatic supply-demand imbalance in global energy markets.
Strive notes that US energy companies are poised to capitalize on this opportunity if they are ‘unshackled’ from constraints imposed by ESG-linked asset managers, restrictions that the firm believes have contributed to the current energy crisis.
The firm intends to use its shareholder engagement and proxy voting power to unlock the potential of the US energy sector by delivering a “post-ESG” mandate to US energy companies – rejecting what it maintains is short-sighted political agendas that have caused companies to underinvest in oil, natural gas, and other promising forms of energy.
Vivek Ramaswamy, co-Founder and Executive Chairman at Strive Asset Management, said: “The largest US asset managers have shackled US energy companies with so-called ‘Scope 3 emission caps’ and other destructive mandates that have contributed to the American energy crisis today.
“The right answer isn’t to complain about it but to solve the problem. We’re proud to offer investors a new choice to align their voice and vote with how US energy companies behave – by helping maximize long-run profits over short-run social fads.”
Methodology
The ETF tracks the Solactive United States Energy Regulated Capped Index which includes energy-related stocks selected from within the 1,000 largest US-listed equities.
The index is represented by firms across the energy sector such as traditional oil, coal, and natural gas companies, as well as firms that produce renewable or alternative energy such as hydrogen, nuclear, solar, and wind power.
Constituents are weighted by float-adjusted market capitalization subject to a cap of 22.5% on the largest stock and a cumulative cap of 45% on all stocks with weights above 4.5%.
As of 12 August, the index contained 52 constituents. Exxon and Chevron accounted for the largest positions with weights of 22% and 16%, respectively, followed by ConocoPhillips at 7% and EOG Resources at 4%.
According to Strive, the index exhibits a 99.7% historical correlation with the broad market BlackRock US Energy Index.