Current U.S. infrastructure is in major need of upgrades; significant investment by governments is already in motion, incentivizing green infrastructure initiatives.
Energy transition has been the early focus of investors, but there are multiple sectors within the green infrastructure space. RNEW is designed to provide diversified exposure.
VanEck today announced the launch of VanEck Green Infrastructure ETF (NASDAQ: RNEW), an equity ETF offering exposure to the leading companies that are poised to drive and benefit from increased investment in efforts to make U.S. infrastructure more “green” and sustainable.
“The state of the U.S.’s infrastructure is in need of renewal and an upgrade in order to support a growing population and the goals of environmental sustainability and climate resiliency. In fact, the American Society of Civil Engineers gave the U.S. a C- grade for its overall infrastructure in 2021, with sub-sectors including energy, hazardous waste and transit all earning D+ grades or worse,” said Michael Cohick, Director of Product Management with VanEck. “Fortunately, government initiatives and private sector innovations are providing potential opportunities for investors to participate in this long-term trend. We’re very pleased to be launching RNEW, with its ability to effectively target sustainable infrastructure companies broadly.”
RNEW seeks to track the Indxx US Green Infrastructure - MCAP Weighted Index (IUGIMWT, “the Index”) and is designed to offer exposure to a diversified portfolio of U.S. companies with revenues primarily generated from sustainable infrastructure businesses across a handful of key themes and sub-themes: environmental waste (including pollution control and waste management), building (including green constructions), and green energy and transportation (green energy and fuel, green transportation, and green infrastructure and equipment).
To be eligible for Index inclusion, companies must generate at least 50% of their revenues from green infrastructure activities, be domiciled in the U.S. and have a market cap of at least $500 million. The portfolio weighting caps sub-themes at 30% and specific equities at 5%.
“Up to this point, the majority of investor focus around green infrastructure has been in what we would term the ‘traditional’ sectors, such as transportation and industry,” said Cohick. “But there are numerous innovations taking place around green initiatives in power storage, construction, waste management and more that will drive the next iteration and evolution of U.S. infrastructure.”
“In August 2022, the U.S. massively increased the tax incentives on domestic clean energy projects through the Inflation Reduction Act,” said Rahul Sen Sharma, Managing Partner at Indxx. This, combined with the allocations in the Infrastructure Investment and Jobs Act account for over half a trillion dollars in new climate action and related infrastructure project spending. We believe that this represents the start of a long-term shift towards sustained green infrastructure investment and growth here in the U.S. We are excited to partner with VanEck, to help investors target this opportunity through the listing of RNEW.”
VanEck also points to the significant commitments and investments already being made in these areas by both Federal and State governments in the U.S., with the Inflation Reduction Act alone providing $130 billion in funds to incentivize green infrastructure initiatives, including tax credits for solar and EV purchases, grants and loans for sustainable energy capital expenditures and both grants and tax credits for a wide array of decarbonization projects.
RNEW joins a set of strategies from VanEck focused on sustainable equity and fixed income exposures, including VanEck Low Carbon Energy ETF (SMOG), VanEck Green Bond ETF (GRNB), VanEck HIP Sustainable Muni ETF (SMI), VanEck Green Metals ETF (GMET), VanEck Future of Food ETF (YUMY) and the actively managed VanEck Sustainability Fund (ENVYX).
The VanEck team provides regular updates and insights on their sustainability solutions and research, which can be accessed here.
VanEck has a history of looking beyond the financial markets to identify trends that are likely to create impactful investment opportunities. We were one of the first U.S. asset managers to offer investors access to international markets. This set the tone for the firm’s drive to identify asset classes and trends – including gold investing in 1968, emerging markets in 1993, and exchange traded funds in 2006 – that subsequently shaped the investment management industry.
Today, VanEck offers active and passive strategies with compelling exposures supported by well-designed investment processes. As of September 30, 2022, VanEck managed approximately $60.8 billion in assets, including mutual funds, ETFs and institutional accounts. The firm’s capabilities range from core investment opportunities to more specialized exposures to enhance portfolio diversification. Our actively managed strategies are fueled by in-depth, bottom-up research and security selection from portfolio managers with direct experience in the sectors and regions in which they invest. Investability, liquidity, diversity, and transparency are key to the experienced decision-making around market and index selection underlying VanEck’s passive strategies.
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Indxx US Green Infrastructure - MCAP Weighted Index (IUGIMWT) tracks the performance of those companies that are involved in the production, transmission, or distribution of green energy and/or are engaged in business activities that seek to establish a sustainable infrastructure to facilitate the holistic use of green energy and positively impact the environment.
“Indxx” is a service mark of Indxx and has been licensed for use for certain purposes by the Adviser. The Fund is not sponsored, endorsed, sold or promoted by Indxx. Indxx makes no representation or warranty, express or implied, to the owners of the Fund or any member of the public regarding the advisability of investing in securities generally or in the Fund particularly. Indxx has no obligation to take the needs of the Adviser or the shareholders of the Fund into consideration in determining, composing or calculating the Underlying Indices. Indxx is not responsible for and has not participated in the determination of the timing, amount or pricing of the Fund shares to be issued or in the determination or calculation of the equation by which the Fund shares are to be converted into cash. Indxx has no obligation or liability in connection with the administration, marketing or trading of the Fund.
An investment in the VanEck Green Infrastructure ETF may be subject to risks which include, among others, green infrastructure companies, green energy companies, environmental services industry, green investing strategy, industrials sector, consumer discretionary sector, utilities sector, technology sector, equity securities, small- and medium-capitalization companies, market, operational, index tracking, authorized participant concentration, new fund, absence of prior active market, trading issues, passive management, fund shares trading, premium/discount and liquidity of fund shares, non-diversified and concentration risks, all of which may adversely affect the Fund. Small- and medium-capitalization companies may be subject to elevated risks.
An investment in the VanEck Low Carbon Energy ETF may be subject to risks which include, among others, investing in low carbon energy companies, investing in Asian, Chinese and European issuers, foreign securities, emerging market issuers, foreign currency, depository receipts, utilities, consumer discretionary, industrials and information technology sectors, small- and medium-capitalization companies, cash transactions, equity securities, market, operational, index tracking, authorized participant concentration, no guarantee of active trading market, trading issues, passive management, fund shares trading, premium/discount risk and liquidity of fund shares, non-diversified and concentration risks, all of which may adversely affect the Fund. Foreign investments are subject to risks, which include changes in economic and political conditions, foreign currency fluctuations, changes in foreign regulations, and changes in currency exchange rates which may negatively impact the Fund's return. Small- and medium-capitalization companies may be subject to elevated risks.
An investment in the VanEck Green Bond ETF may be subject to risks which include, among others, green bonds, investing in Asian, Chinese, European, and emerging market issuers, foreign securities, foreign currency, credit, interest rate, floating rate, floating rate LIBOR, high yield securities, supranational bond, government-related bond, restricted securities, securitized/asset-backed securities, financials sector, utilities sector, market, operational, call, sampling, index tracking, authorized participant concentration, no guarantee of active trading market, trading issues, passive management, fund shares trading, premium/discount and liquidity of fund shares, and concentration risks, all of which may adversely affect the Fund.
An investment in the VanEck HIP Sustainable Muni ETF may be subject to risks which include, among others, risks related to sustainable impact investing strategy, municipal securities, credit, interest rate, call, data, California, New York, education bond , health care bond, housing bond, transportation bond, active management, operational, authorized participant concentration, no guarantee of active trading market, trading issues, market, fund shares trading, premium/discount and liquidity of fund shares, non-diversified, and state concentration risks, all of which may adversely affect the Fund. Municipal bonds may be less liquid than taxable bonds. There is no guarantee that the Fund's income will be exempt from federal, state or local income taxes, and changes in those tax rates or in alternative minimum tax rates or in the tax treatment of municipal bonds may make them less attractive as investments and cause them to lose value. Capital gains, if any, are subject to capital gains tax. The Fund's assets may be concentrated in a particular sector and may be subject to more risk than investments in a diverse group of sectors.
An investment in the VanEck Green Metals ETF may be subject to risks which include, among others, risks related to investing in green metals, clean energy companies, regulatory action and changes in governments, rare earth and strategic metals companies, Australian Asian, European and Chinese issuers, investing through stock connect, foreign securities, emerging market issuers, foreign currency, basic materials sector, mining industry, small- and medium-capitalization companies, cash transactions, equity securities, market, operational, index tracking, authorized participant concentration, no guarantee of active trading market, trading issues, passive management, fund shares trading, premium/discount and liquidity of fund shares, non-diversified, and concentration risks which may make these investments volatile in price or difficult to trade. Small- and medium-capitalization companies may be subject to elevated risks.
An investment in the VanEck Future of Food ETF may be subject to risks which include, among others, risk of investing in agri-food technology and innovation food companies, equity securities, investing in small- and medium-capitalization companies, basic materials, industrials and consumer staples sectors, investing in European issuers, foreign securities, foreign currency, management, market, operational, authorized participant concentration, new fund, absence of prior active market, trading issues, fund shares trading, premium/discount and liquidity of fund shares, non-diversified, initial public offerings, special purpose acquisition companies, and concentration risks, which may make these investments volatile in price or difficult to trade. Small- and medium capitalization companies may be subject to elevated risks.
You can lose money by investing in the VanEck Sustainability Fund. Any investment in the Fund should be part of an overall investment program, not a complete program. An investment in the Fund may be subject to risks which include, among others, investing in derivatives, equity securities, emerging market securities. environmental–related securities, foreign currency transactions, foreign securities, investments in other investment companies, management, market, new fund risk, non–diversification, operational, sectors, small and medium capitalization companies, special purpose acquisition companies. Small- and medium-capitalization companies may be subject to elevated risks.
The Fund’s sustainability strategy may result in the Fund investing in securities or industry sectors that underperform other securities or underperform the market as a whole, and may result in the Fund being unable to take advantage of certain investment opportunities, which may adversely affect investment performance. The Fund is also subject to the risk that the companies identified by the Adviser do not operate as expected when addressing sustainability issues. Regulatory changes or interpretations regarding the definitions and/or use of sustainability criteria could have a material adverse effect on the Fund’s ability to invest in accordance with its sustainability strategy.
Sustainable Investing Considerations: Sustainable investing strategies aim to consider and in some instances integrate the analysis of environmental, social and governance (ESG) factors into the investment process and portfolio. Strategies across geographies and styles approach ESG analysis and incorporate the findings in a variety of ways. Incorporating ESG factors or Sustainable Investing considerations may inhibit the portfolio manager’s ability to anticipate in certain investment opportunities that otherwise would be consistent with its investment objective and other principal investment strategies.
ESG investing is qualitative and subjective by nature, and there is no guarantee that the factors utilized by VanEck or any judgment exercised by VanEck will reflect the opinions of any particular investor. Information regarding responsible practices is obtained through voluntary or third-party reporting, which may not be accurate or complete, and VanEck is dependent on such information to evaluate a company’s commitment to, or implementation of, responsible practices. Socially responsible norms differ by region. There is no assurance that the socially responsible investing strategy and techniques employed will be successful. An investment strategy may hold securities of issuers that are not aligned with ESG principles.
ESG integration is the practice of incorporating material environmental, social and governance (ESG) information or insights alongside traditional measures into the investment decision process to improve long term financial outcomes of portfolios. Unless otherwise stated within an active investment strategy’s investment objective, inclusion of this statement does not imply that an active investment strategy has an ESG-aligned investment objective, but rather describes how ESG information may be integrated into the overall investment process.
Investing involves substantial risk and high volatility, including possible loss of principal. An investor should consider the investment objective, risks, charges and expenses of the Fund carefully before investing. To obtain a prospectus and summary prospectus, which contains this and other information, call 800.826.2333 or visit vaneck.com. Please read the prospectus and summary prospectus carefully before investing.
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