China Clean Energy

Hong Kong

Global X lists China clean energy ETF

Korean investment giant Mirae has widened out its Hong Kong ETF suite, under its Global X sub-brand. The Global X China Clean Energy ETF (2809) will invest in Chinese companies helping to combat global warming, by producing renewable energy. 

Like most Global X indexes, this new fund tracks a Solactive index. The index uses public documents to identify Chinese companies in solar, tidal, wind and other energy sources. The fund charges 0.68%.

Analysis – sounds like a great idea

If I were to pick one country’s alternative energy sector I would pick China’s. China has been the world’s most proactive clean energy investor. I think this is partly due to the fact that Chinese oil majors (CNOOC, Sinpoec, PetroChina) are state-owned and the Chinese economy is well diversified. This state ownership means they aren’t allowed to direct their vast resources into global warming denial. While diversification means that China has less to lose if the global oil industry disappears – unlike Saudi Arabia, Kuwait, Qatar.

While potentially rewarding, the fund has risks. Looking through the index backtest provided by Solactive, the fund is fiercely volatile, with -10% drawdowns occurring almost every month. The fund only holds 18 companies at the time of writing. I must confess I’ve never heard of any of them. 

Still, it’s a nice idea

Indonesia

Indonesia gets ESG ETFs via Sinar Mas and BNI

Jakarta is getting its first two ESG ETF. They are:

  • STAR ETF SRI-KEHATI (XSRI)
  • BNI-AM ETF MSCI ESG Leaders Indonesia (XBES)

XSRI is listed by the Sinar Mas Group – one of Indonesia’s largest conglomerates – in conjunction with a local not-for-profit called the Kehati Foundation, which manages the index. The fund invests in Indonesian companies that get past certain SRI screens, English language detail about which I cannot find.

XBES is listed by BNI Asset Management, one of Indonesia’s largest financial institutions. The fund buys 40-odd of the largest companies in Indonesia, that meet basic ESG criteria. The companies chosen are then market weighted.