Top ESG ETFs of November 2021

Carbon and Future Mobility have made it to November’s top ESG ETF list. Below we explain why they are at the top this month and we share a list of specific funds you can explore for your own portfolio.

European Carbon futures surge on post-COP26 action plans

Carbon Futures Dec '21 (CKZ21) ended November 28% higher to reach a new all-time high of €75.37/ton of CO2, just weeks after world leaders met in Glasgow to discuss decarbonization action plans for the next few decades.

Consequently, ESG ETFs with EU Carbon Futures exposure rose from the ranks to lead November's best ESG ETFs lineup, including  SparkChange Physical Carbon EUA ETC – CO2 (+25.86%), WisdomTree Carbon - CARP (+25.84%), KraneShares European Carbon Allowance ETF (23.26%) and KraneShares Global Carbon ETF - KRBN (+17.30%).

Future Mobility ETFs lifted by surge in Semiconductor industry outlook

Semiconductors stocks maintain their uphill trajectory after the Semiconductors Industry Association reported stellar third quarter revenue figures. The report published early November shows that sales totaled $144.8 billion during the third quarter of 2021, an increase of 27.6% over last year's third quarter and 7.4% more than the second quarter of 2021. The association also reported that more semiconductor units were shipped during the third quarter of 2021 than during any other quarter in the market’s history. The market update coupled with the passing of the U.S. $1 trillion dollar infrastructure bill bolstered the industry's future demand prospects.

Over the past month, the Semiconductors & Semiconductor Equipment industry of the S&P 500 gained more than 10%, the best performing industry of the index during that period. Consequently, ESG Thematic ETFs Lyxor MSCI Future Mobility ESG Filtered (DR) UCITS ETF – MOBI (+5.68%), iShares Self-Driving EV and Tech ETF - IDRV (+4.40%) and Evolve Automobile Innovation Index ETF -CARS.U (+2.87%) made it to the top ESG ETFs for the month of November. Even though they have a broader exposure to Electric Vehicles (EVs) manufacturers and the rest of the supply chain, they have a good amount of exposure to semiconductor manufactures or businesses that consume them (Automotive, Robotics, AI etc..). For instance, EVs requires up to 2,000 chips on average.

Lyxor MSCI Semiconductors ESG Filtered UCITS ETF (CHIP) on the other hand focuses purely on semiconductor stocks. This ETF has an ESG twist, excluding companies involved in certain controversial businesses (tobacco, weapons, thermal coil, etc.) or have low ESG controversies and ratings scores relative to a reference.

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