ESG ETFs dominate new launches

• Almost half of the newly launched ETFs last week around the world have an ESG focus (10 out of 21 ETFs).
• Most of the new launches were Equity ETFs (18 ETFs).
• Among the new ETFs, six are Actively Managed ETFs.
• Providers in the spotlight: UBS launched four ETFs and Nuveen three.

We scanned the list for you and review three of the hottest launches of the week. Keep reading to find out all about Invesco Solar Energy ETF (ISUN LN), Virtus Duff & Phelps Clean Energy ETF (VCLN) and iShares MSCI Global Semiconductors UCITS ETF (SEMI).

ESG themes take the highlight of this week’s new launches

Last week, the ETF universe expanded with 21 new ETFs, and half of the new releases focus on ESG investing, a trend that is flourishing this year. As of July, a historic share of 50% of the 2021 flows went to ESG ETFs in Europe.

On a global basis, ETFs which follow a sustainable investment approach or theme continue to shatter new records with $325 billion of assets and $100 billion of inflows year-to-date. This already tops the total flows into ESG ETFs in 2020 of $88.5 billion. The number of ESG ETFs listed worldwide has skyrocketed in 2021 with 174 new ETFs as issuers rush to capture this asset windfall.

Invesco, the fourth largest ETF provider in terms of assets under management, launched the Invesco Solar Energy ETF (ISUN), an ESG ETF with a focus on global solar energy players. In the same spectrum, Duff & Phelps Investment Management Co. created Virtus Duff & Phelps Clean Energy ETF, an actively managed ETF that invests in clean and sustainable energy companies.

Besides ESG, the semiconductors industry was in the spotlight this year with booming demand and supply shortages. The newly launched iShares MSCI Global Semiconductors UCITS ETF (SEMI) by BlackRock targets that area with exposure to mid and small-cap companies involved in the semiconductors industry.

Here’s what you need to know about these new ETFs. 

Notable ETF launches of the week: ISUN, VCLN and SEMI

1. ISUN LN - Invesco Solar Energy ETF 

• Launch Date: 02/08/2021 
• Provider: Invesco EMEA ETFs/Ireland
• AUM: $2.3 M
• Umbrella AUM: $6.7 Bn
• Expense Ratio: 0.69% 
• Listing Exchange: London Stock Exchange (LSE)

With the goal of reaching net-zero carbon emissions in the next few decades, plans set out by the governments of the US, UK, EU and China all involve a substantial increase in their capacity to generate electricity from renewable energy. Solar energy will be one of its main beneficiaries as floodgates will open to billions of governments and investors’ money.

According to the International Renewable Energy Agency (IRENA), the total installed capacity of solar photovoltaic grew by 1,655% in ten years from 40,297 MW in 2010 to 707,500 MW in 2020. The agency says solar may reach 2,840 GW of installed capacity by 2030, accounting for 13% of total global power generation and that figure could rise to 8,519 GW in 2050 with a 25% share.

Betting on the solar energy future, Invesco has unveiled the Invesco Solar Energy UCITS ETF (ISUN). ISUN tracks the MAC Global Solar Energy index which currently offers exposure to 46 companies involved in the transition to solar energy. The reference index is structured to track the performance of companies globally within the solar energy industry, with diversified exposure to all solar technologies, the entire value chain and related solar equipment.

The newly launched Solar ETF resembles its global parent The Invesco Solar ETF (TAN). Despite the year-to-date dip, TAN remains a highflyer with more than 200% in returns since January 1st, 2020. Could ISUN follow path in the future?

ISUN LN share price, performance since launch, and more here. 

2. VCLN - Virtus Duff & Phelps Clean Energy ETF

• Date: 03/08/2021 
• Provider: Virtus ETF Advisers LLC
• AUM: $2.58 M 
• Expense Ratio: 0.59% 
• Listing Exchange: New York Stock Exchange (NYSE)

Clean Energy ETFs hit a brick wall in 2021 despite the amazing run one year prior. Consequently, ETFs that track renewable energy indices have suffered double-digit declines this year, but investors continued to pump $6.2 billion into green ETFs this year. The year-to-date total is already on pace to surpass last year’s record of $7.2 billion.

With a positive outlook in sight, Virtus ETF Advisers LLC recently announced the introduction of the Virtus Duff & Phelps Clean Energy ETF (VCLN) the first ETF strategy managed by Duff & Phelps. The new actively managed ETF seeks to invest globally in a portfolio of clean, renewable, and sustainable companies and technologies that will power the energy needs of the future. It tracks its performance versus the S&P Global Clean Energy Index (net).

VCLN top holding include Enphase Energy (7.06%), Orsted A/S (5.99%) and Vestas Wind Systems A/S (5.85%).

See VCLN share price, performance since launch, and more here. 

3. SEMI – iShares MSCI Global Semiconductors UCITS ETF

• Launch Date: 05/08/2021 
• Provider: iShares (BlackRock)
• AUM: $15.2 M
• Expense Ratio: 0.35%
• Listing Exchanges: Euronext and Deutsche Boerse

The Semiconductor Industry Association (SIA) announced the global semiconductor industry sales were $439.0 billion in 2020, an increase of 6.5% compared to the 2019 total of $412.3 billion. The largest end use markets for semi-conductors are computers and consumer, automobile, industrial, and communications equipment, which collectively consume over 85% of all semi-conductors. Boston Consulting Group estimated that companies will need to inject about $3 trillion into R&D and capital expenditure across the value chain to meet the booming demand for semiconductors over the next 10 years.

Joining the exciting thematic investing scene is the passively managed iShares MSCI Global Semiconductors UCITS ETF (SEMI) by BlackRock with $15.2 million in AuM.

Physically replicated, SEMI tracks the MSCI ACWI IMI Semiconductors & Semiconductor Equipment ESG Screened Select Capped index which offers exposure to 234 large, mid and small-cap companies involved in the semiconductors industry. Its main holdings include Nvidia Corp. (9.23%), ASML Holding NV (8.06%) and Taiwan Semi-Conductor Manufacturing (6.97%)

And as the world dives deeper in tech, Semi-conductor ETFs represent an opportunity to ride the wave of innovation. 

See SEMI share price, performance since launch, and more.

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