As the world places increasing importance on clean energy and low-carbon technologies, the significance of raw materials needed to create lower-carbon and clean energy infrastructure cannot be ignored.
You might be wondering how the influence of materials comes into the picture when at first glance, raw material sourcing seems to contribute to the emissions of greenhouse gases (GHG).
In fact, according to the World Economic Forum’s Net-Zero Industry Tracker, if no effort is made to decarbonise, the GHG emissions by the cement and steel sectors are expected to grow to 31% and 43% by 2050 respectively.
But here’s how these materials companies can play a crucial role in the transition to a low-carbon economy.
Simply put, materials are key ingredients for a successful move to a low-carbon economy; for the low-carbon transition to happen, businesses must supply materials such as aluminium, lithium, cobalt and the various rare earths required to build lower-carbon technologies like wind turbines, solar panels and the batteries that power electric vehicles.
In addition, materials like copper are required to transform the underlying power grid so that they are able to flow energy generated in one part of the network to another, which is essential to the seamless integration of renewable energy sources into the existing energy architecture.
With this in mind, below are 3 materials-oriented thematic products associated with the low-carbon transition to keep a lookout for.
iShares Copper and Metals Mining ETF (ICOP)
| Assets under management (AUM) | 16.91M |
| Average daily trading volume | 23,456 |
| Expense ratio | 0.47% |
ICOP aims to track the performance of the STOXX Global Copper and Metals Mining Index which consists of companies with significant exposure to the copper mining industry.
This fund gives investors access to global copper and metal ore miners who may benefit from a growing demand for this limited resource. Its top 10 holdings account for 62.37% of its assets and feature the following companies:
- Grupo Mexico B
- Freeport-McMoran Inc
- Southern Copper Corp
- BHP Group Ltd
- Antofagasta PLC
- Ivanhoe Mines Ltd
- Lundin Mining Corp
- First Quantum Minerals Ltd
- KGHM Polska Miedz S.A.
- Capstone Copper Corp
iShares Global Metals & Mining Producers ETF (PICK)
| Assets under management (AUM) | 1.16B |
| Average daily trading volume | 283,408 |
| Expense ratio | 0.39% |
The PICK ETF tracks the MSCI ACWI Select Metals & Mining Producers Ex Gold & Silver Investable Market Index, providing investors exposure to companies engaged in the mining, extraction, or production of diversified metals, aluminium, steel, and precious metals and minerals.
With an expense ratio of 0.39%, the PICK ETF is the fund with the lowest fees in this list. The ETF is also made up of 261 holdings, led by the following 10 companies:
- BHP Group Ltd
- Rio Tinto PLC
- Freeport Mcmoran Inc
- Glencore PLC
- Nucor Corp
- Cia Vale Do Rio Doce SH
- Anglo American PLC
- Rio Tinto Ltd
- Fortescue Ltd
- Steel Dynamics Inc
iShares Lithium Miners & Producers ETF (ILIT)
| Assets under management (AUM) | 2.59M |
| Average daily trading volume | 5,735 |
| Expense ratio | 0.47% |
The iShares Lithium Miners & Producers ETF focused on holding shares of companies engaged in lithium ore mining and/or lithium compounds manufacturing.
The fund holds shares of 45 companies, and its top 10 holdings include:
- Albemarle Corp
- Sociedad Química y Minera de Chile
- Pilbara Minerals Ltd
- Cosmo AM&T Ltd
- Arcadium Lithium PLC
- Lithium Americas PCorp
- SK IE Technology Ltd
- Liontown Resources Ltd
- Sigma Lithium Corp
- Tianqi Lithium Industries Corp A
You must be logged in to post a comment.