TrueMark Investments has unveiled a new actively managed ETF targeting companies providing the infrastructure facilitating the clean energy megatrend.
The ETF invests in companies operating renewable energy facilities, energy storage systems, and electric transmission assets.
The TrueShares Eagle Global Renewable Energy Income ETF (RNWZ US) has been listed on NYSE Arca with an expense ratio of 0.75%.
The fund is sub-advised by Texas-based investment advisor Eagle Global Advisors which has been managing energy infrastructure strategies since 2003 and renewable infrastructure strategies since 2017.
Eagle Global notes that the clean energy investment theme is supported by the combination of policy tailwinds (currently, 130 countries have set or are considering setting a net-zero emissions target by 2050) and superior economics (wind and solar generation costs have declined by over 80% in the past decade, making these renewable energies the cheapest source of power generation in most countries).
With global energy consumption expected to grow 40% by 2050, and the share of energy consumption from renewables set to grow from 17% to 28% over the same period, Eagle Global believes these dynamics are setting up a potential multi-decade growth story.
Michael Cerasoli, Portfolio Manager at Eagle Global Advisors, commented: “RNWZ is a great vehicle for investors to gain access to the global megatrend created by declining renewables costs and global efforts at decarbonization. Above and beyond the environmental characteristics, the next generation of renewable infrastructure companies is laying the groundwork necessary to restructure power grids and commercialize the utility of solar, wind, hydro, and biomass alternatives that have more runway and tailwinds than ever before.
“The recent passage of the Inflation Reduction Act is a jolt of energy to the transition to renewables power generation. We’re confident that continuing down this path will lead to more sustainable infrastructure and an exciting transition to cleaner energy alternatives.”
Michael Loukas, CEO of TrueMark Investments, added: “We’re extremely excited to partner with an energy manager of Eagle Global’s caliber. Given the ongoing tailwinds in the renewable energy infrastructure industry, their wealth of experience in the sector gives us confidence that RNWZ is in capable hands. From an investment perspective, we believe that this concentrated portfolio has the potential to produce a steady current income stream coupled with the possibility of meaningful future upside.”
Investment approach
The ETF holds just 25 to 30 stocks, targeting companies that primarily own and operate renewable energy assets such as energy production facilities (eligible types of renewable energy sources include biofuels as well as solar, wind, hydro, nuclear, and geothermal power), energy storage systems, and electric transmission grids.
According to the ETF’s prospectus document, Eagle Global will seek out companies that are generating stable cash flow streams derived from long-term contracts with governments, utilities, and corporations.
Portfolio constituents may be sourced from any developed or emerging market country globally, and the fund may invest in listed companies of any size.
Investors wishing to access the renewable infrastructure investment theme have a few competing products to choose between.
JP Morgan also offers an actively managed ETF in this space – the JPMorgan Sustainable Infrastructure ETF (BLLD US) comes with an expense ratio of 0.49%.
Investors seeking a passive approach to the theme may wish to consider the VanEck Green Infrastructure ETF (RNEW US) or First Trust NASDAQ Clean Edge Smart Grid Infrastructure Index Fund (GRID US) which are priced at 0.45% and 0.63%, respectively.