China’s green energy ETFs outperformed other thematic and broad ETF strategies in early 2021, signaling an economic shift towards greener energy and more environmentally friendly consumer products than ever before. ‘have done.
According to data from Wind Info, ETFs investing in green energy dominate China’s top performing ETF list in the first six months of the year, with seven out of ten ETFs dominated by green energy. Theme product.
E-Fund Management’s E-Fund CSI New Energy ETF rose 45.5%, leading the market, and China Asset Management’s China AMC CSI New Energy ETF returned 44.6%.
Penghua Fund Management’s Penghua CSI China Mainland Low Carbon Economic ETF came in third with a return of 42.5%, and the Ping An CSI New Energy Car Industry ETF returned 41.9% in the first semester of this year.
Xi Jinping Jintao of China National carbon emissions China peaked in 2030, before gradually transitioning to a carbon neutral economy by 2060.
Kevin Shu, Deloitte China partner and leader in mining and metals, said most Chinese green energy ETFs focus on electric vehicles, batteries or solar power.
“With China’s carbon targets for 2030-2060, the power transmission and manufacturing sectors are in the limelight, making it the first step towards reducing carbon emissions,” he said. Xu said.
Kanting Ye, a Singapore-based senior analyst in Asia and head of China research practices at Cerulli Associates, said the rise of the green energy sector was due to an increase in domestic supply and demand. paddy field.
Exports of green energy materials include US President Joe Biden’s recent clean energy program and the EU program Green accord (Carbon frontier adjustment mechanism).
Ng Sze Yoon, senior director of Asia Pacific Insights, Singapore-based Broadridge, said China’s clear and collective focus on efforts to tackle climate change has spurred the growth of green energy ETFs. I agreed to play.
“As part of the country’s political priorities, China has set ambitious carbon emissions targets to reduce risks from climate change, as Chinese companies actively work on clean energy and energy savings. Represents a rapidly growing market in China, ”she said.
Chinese government asset managers, asset owners and investors Guidance on climate finance, And develop environmental, social and governance strategies for climate change mitigation, Ng added.
Last October, five Chinese ministries jointly issued climate finance guidance on promoting investment and finance to combat climate change, aligning funding flows with China’s ecological and climate ambitions. paddy field.
Of the 925 Chinese ETFs registered in the market, over 60% performed positively and around a third performed negatively.
According to Wind data, around 205 ETFs have been launched in China this year, including 18 on the topic of technology, 11 on the topic of green energy and 10 on the topic of the star market.
Chinese authorities can promote green energy and electric vehicles to facilitate the inflow of funds into ESG-linked ETFs to meet their carbon neutrality goals.
Kangting de Cerulli said he expects China’s green energy ETFs to continue to perform well.
Broadridge’s Ng also agreed that the performance of green energy ETFs will likely remain strong due to the promotion of regulation.
But she said it’s important to distinguish between the truly top performing companies that have been identified as adopting new, clean, green and innovative strategies, and those that are simply riding the green wave. I did.
Xu of Deloitte said he expects long-term structural growth for China’s green energy sector.
For example, China has announced plans to install more than 30 gigawatts of green energy storage capacity by 2025 as part of its efforts to increase consumption of renewable energy.
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