Popularity amongst investors for thematic investment strategies remains high, writes Global X, citing CNBC’s claim that assets in thematic ETFs have hit USD133 billion, up from USD27 billion before the pandemic.
Popularity amongst investors for thematic investment strategies remains high, writes Global X, citing CNBC’s claim that assets in thematic ETFs have hit USD133 billion, up from USD27 billion before the pandemic.
Global X ETFs’ new ETFs track companies operating on technologies that are expected to shape the planet’s future. The three ETFs are the Global X Hydrogen ETF, the Global X AgTech & Food Innovation ETF and the Global X Blockchain ETF. All ETFs track Solactive indices as their underlying, respectively.
The firm writes that hydrogen, the most plentiful element in the entire universe, serves as one of the promising clean energy sources in the fight against climate change. According to the EU Commission, cumulated investments in renewable hydrogen could reach between 180 and 470 billion EUR by 2050, and it is estimated that, by then, renewable hydrogen will match around one-fourth of the global energy demand, with an annual revenue of around EUR630 billion. The Global X Hydrogen ETF is designed to benefit from the vast potential that lies in this powerful element. Solactive writes that the index serves as a representation of securities of companies that have business operations in the production or use of hydrogen as a fuel source, including companies operating in the following segments: Hydrogen Production, Hydrogen Fuel Cells, Hydrogen Technology, and Hydrogen Integration.
The second ETF is the Global X AgTech & Food Innovation ETF. Solactive writes that the food sector has become one of the key global industries, accounting for around 10 per cent of GDP worldwide. Solactive writes that due to the increasing demand from an expanding population, the necessity to reduce greenhouse gas emissions, and a shift in the population’s nutrition preferences, companies that implement innovations in agriculture and food manufacturing will have a solid base to grow in the near future. The Solactive AgTech & Food Innovation Index underlying Global X’s new ETF serves as a representation of securities of companies that have business operations in technologies for agriculture and innovative food production and distribution. On one hand, the index includes companies active in Relevant AgTech Activities such as Precision Agriculture, Controlled Environment Agriculture, or Agricultural Biotechnology.
On the other hand, companies active in relevant food innovation activities such as Protein & Dairy Alternatives and Food Waste Reduction are eligible for index inclusion.
The third ETF, the Global X Blockchain ETF, tracks companies involved in business operations in the provision of blockchain technologies. According to a recent study, the global blockchain market size is expected to grow from USD 3.0 billion in 2020 to USD 39.7 billion by 2025 at an impressive compound annual growth rate (CAGR) of 67.3 per cent during 2020–2025.2 The Solactive Blockchain Index includes companies with business operations in the provision of blockchain technologies. The index includes, for example, companies active in Digital Asset Mining, Blockchain & Digital Asset Transactions, and Blockchain & Digital Asset Integration.
Timo Pfeiffer, Chief Markets Officer at Solactive, says: “Every now and then, new technologies emerge, opening an entirely new universe of application purposes. One recent example is blockchain technology, whose wide adoption will lead to new possibilities, for example, in data security and contract settling. With hydrogen gradually revolutionising the transportation business, Global X’s second ETF not only includes stocks with a potential strong growth but also emphasises on technology necessary in the fight against climate change. In conclusion, the three new Global X ETFs are a prime example of forward-thinking consideration on how to both give investors added value for their portfolios while fostering technology that will have an impact towards a sustainable future.”
