VanEck has announced the launch of the VanEck Green Metals ETF (GMET), a new fund that provides comprehensive global exposure to the producers, refiners, processors and recyclers of the green metals that are essential to the world’s ongoing transition to a low carbon economy.
“New technologies, from electric vehicles to offshore wind farms, cannot function without green metals such as lithium, copper, zinc and manganese. As governments around the world mandate and consumers embrace these shifts to lower carbon approaches, demand for these metals is only expected to increase,” says Brandon Rakszawski, Senior ETF Product Manager with VanEck. “We’re very pleased to be introducing GMET, a powerful new tool for investors looking to add global exposure to the leading and emerging companies driving the supply of green metals.”
VanEck notes that the share of demand for green metals is poised to be driven by an increase in clean energy projects and advancements in the decades to come. “For example, according to the IEA, as of 2020, clean energy efforts drove 29 per cent of the demand for lithium. That number is expected to increase to 92 per cent by 2040. Similarly, clean energy demand for cobalt is expected to rise from 15 per cent to 69 per cent; while clean energy demand for nickel is expected to increase from 8 per cent to 61 per cent over the same time frame. Concurrently, significant deficits in supply relative to increasing demand, long project lead times and declining resource quality all have the potential to drive metals prices higher.”
“Those trends are key to note, but the green metals story is not just one of supply and demand,” says Rakszawski. “In the transition to a low carbon economy, we are poised to see a shift in geographic influence as countries like China, Chile and the Democratic Republic of Congo are well positioned to influence the global supply of green metals, making a global approach to this category essential for investors.”
GMET seeks to track as closely as possible, before fees and expenses, the price and yield performance of the MVIS Global Clean-Tech Metals Index (MVGMETTR), a rules-based index offering exposure to companies involved in the production, refining, processing and recycling of metals used in applications, products and processes that enable to energy transition.
“We are pleased to provide the index to VanEck’s new ETF. Our new and innovative index builds on MVIS’ long history of providing investable benchmarks for investors seeking exposure to companies involved in natural resources industries. The index provides investors a tool to target their commodity exposure on companies involved in mining, recycling, or producing the raw materials that facilitate the world’s transformation to clean energy,” says Josh Kaplan, Global Head of Research & Investment Strategy at MV Index Solutions.
GMET is listed on the NYSE Arca and has a net expense ratio of 0.59 per cent.