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Explore Sustainable Investing through China Thematic ETFs

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Union Bancaire Privee

This is a sponsored article from Global X ETFs


China has been undergoing disruptive changes in technology, people and demographics, as well as the physical environment.

Spurred by rapid advances in technological innovation and public investment, the country is driving major transformations in its energy consumption structure to reduce reliance on fossil fuels, aiming to achieve the ambitious goal of carbon neutrality by 2060.

China has also embraced the electric vehicle revolution with zeal as it strives to battle air pollution and achieve sustainable development.

This offers investors huge opportunities to not only benefit from investing in long-term structural transformation that addresses national security issues and the new infrastructure initiative, but also to be socially responsible.

What is thematic investing?

Thematic investing refers to the process of identifying powerful macro-level trends and the underlying investments that stand to benefit from the materialization of those trends.

It is a forward-looking growth play and helps investors invest in businesses of the future. It focuses on long-term changes that represent a shift in an existing paradigm at an early stage, as opposed to cyclical changes that are only based on changes in business cycles and thus will not sustain.

Thematic investing combines both a top down approach where fund managers identify a disruptive long term theme and a bottom up approach of finding companies with high exposure to these trends.

Why thematic ETFs?

Thematic ETFs look beyond traditional geographic or sector exposures, and target companies potentially poised to benefit from structural shifts.

A key potential benefit of using thematic ETFs is the ability to access dozens of companies around an investment theme in a single trade at a much lower cost compared to that of mutual funds.

Thematic investing adopts an unconstrained approach, which is agnostic to traditional sector classifications. As a result, thematic investing can have low correlations to other portfolio strategies, which can be particularly useful for investors seeking to diversify sources of growth.

Global X China Clean Energy ETF (2809 HK)

Global X China Clean Energy ETF is the first ESG and green ETF certified by the Hong Kong Securities and Futures Commission. With a return of 82% in 20201 , the fund was awarded “Top Performing ETF – Total Return” by the Stock Exchange of Hong Kong (“HKEX”), based on the total return from 2 January 2020 to 31 December 2020 across all Hong Kong listed ETFs.

As the world’s largest manufacturer, exporter and installer of solar panels and wind turbines, China is already a global leader in terms of renewables-related innovation and technology. Chinese firms now produce 72% of the world’s solar modules, 69% of its lithium-ion batteries and 45% of its wind turbines2.

As the cost of renewables continues to fall, clean energy sources such as solar, wind, hydro and nuclear are likely to become the mainstream globally and China will be at the forefront of this transformation.

Global X China Electric Vehicle and Battery ETF (2845 HK)

Global X China Electric Vehicle and Battery ETF is Hong Kong’s first and only ETF that invests in China electric vehicle theme and provides exposure to Chinese companies that are related to electric vehicles, batteries, key materials and components. With a return of 130% in 20203 , it was also awarded “Top Performing ETF – Total Return” by the HKEX in 2020, based on the total return from 2 January 2020 to 31 December 2020 across all Hong Kong listed ETFs.

China has been actively nurturing its EV industry as it aims to reduce reliance on imported oil and find new uncontested ground to compete against global car manufacturers. As the world’s largest electric vehicle market, China has carved out a leadership position and is heading towards disrupting the current global auto industry landscape.

Global champions have also appeared in every part of the electric vehicle supply chain, from innovative battery manufacturers to leading producers of battery minerals. As technological advancements continue to make electric vehicles cheaper, more efficient and easier to charge, China is set to dominate the electric future of motoring.

ETF solutions that look beyond ordinary

Mirae Asset Global Investments provides a diverse range of investment products including mutual funds, exchange traded funds (“ETFs”) and alternatives, with combined assets under management (AUM) of over $194 billion. Its global ETF platform features a line-up of 325 ETFs with combined AUM of $58.8 billion, including Global X ETFs, Horizons ETFs and Tiger ETF. In Hong Kong, Mirae Asset Global Investments (Hong Kong) Limited (“MAGIHK”) has 18 ETFs with AUM of $2.2 billion under Global X ETFs series. At Global X, we think beyond the ordinary – we strive to offer investors thematic opportunities that transcend common and traditional broad market and sector exposures.
* Figures as of 31 March 2021, unless specified.

1. Mirae Asset Global Investments, 31 Dec 2021.
2. The Economist, Sep 2020.
3. Mirae Asset Global Investments, 31 Dec 2021.

Global X China Clean Energy ETF & Global X China Electric Vehicle and Battery ETF are included in the list of restricted schemes, please note that the inclusion of schemes in the list of restricted scheme indicates that Monetary Authority of Singapore (“MAS”) has been informed of their intended offer in Singapore to institutional and/or accredited investors (as defined under the Securities and Futures Act). These schemes are not authorized or recognized by MAS for offer to non-institutional and/or non-accredited investors. Inclusion in the list of restricted schemes does not indicate that MAS has licensed or endorsed the manager for the scheme.
This document contains the opinions of Mirae Asset Global Investments (Hong Kong) Limited (“MAGIHK”) and is intended for your use only.

It is not a solicitation, offer or recommendation to buy or sell any security or other financial instrument and shall not constitute any form of regulated financial advice, legal, tax, or other regulated services. Information contained herein has been obtained from sources believed to be reliable but is not guaranteed. MAGIHK makes no representation as to their accuracy or completeness and therefore, does not accept any liability for a loss arising from the use of this document.

All investments contain risks. Forecasts, past information, and estimates have certain inherent limitations. Statements concerning financial market trends or portfolio strategies are based on current market conditions, which will fluctuate. There is no guarantee that these opinions are suitable for all investors and each investor should evaluate their ability to invest for the long term, especially during periods of downturn in the market. Outlook and strategies are subject to change without notice.

Past performance is not a guarantee or a reliable indicator of future results. Before making any investment decision, investors should read the applicable fund prospectus for details and the risk factors. Investors should ensure they fully understand the risks associated with the applicable investment and should also consider their own investment objective and risk tolerance level. Investors are advised to seek independent professional advice if in doubt.

Hong Kong, including Asia ex Japan

Issuer: Mirae Asset Global Investments (Hong Kong) Limited. This document has not been reviewed by the Securities and Futures Commission and Monetary Authority of Singapore in which this article is posted and no part of this publication may be reproduced in any form, or referred to in any other publication, without express written permission of MAGIHK.
Copyright © 2021 Mirae Asset Global Investments. All rights reserved.


Union Bancaire Privee

This is a sponsored article from Global X ETFs

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