VanEck today announced a change to the underlying Index for its VanEck Vectors Low Carbon Energy ETF (NYSE: SMOG), enhancing the Fund’s primary investment strategy and providing more diversified exposure to the evolving, dynamic low carbon energy economy.
Going forward, SMOG’s underlying index will be the MVIS Global Low Carbon Energy Index (“the Index”), a rules-based index that tracks the performance of globally listed equities involved in the low carbon energy ecosystem.
“SMOG was one of the first ETFs to provide exposure to companies involved in low carbon, clean energy. Since the time of its launch, the industry has evolved substantially. Many segments of the industry are maturing and expanding. The new index modernizes and expands the expected exposure to the low carbon energy ecosystem,” said Ed Lopez, Head of ETF Product with VanEck.
The Index is designed to represent companies across a comprehensive modern set of renewable energy sub-themes including wind, solar, hydro, hydrogen, bio-fuel or geothermal technology, lithium-ion batteries, electric vehicles and related equipment, waste-to-energy production, smart grid technologies, or building or industrial materials that reduce carbon emissions or energy consumption.
Its free-float market cap approach provides sufficient liquidity and allows emerging sub-themes to increase in prominence in the Index as that sub-theme grows. To be initially eligible for inclusion in the Index, companies must generate at least 50% of their revenues, operating activity or energy generation capacity from renewable energy and all securities must have a market capitalization of greater than $150 million as of the end of the month prior to the month in which a rebalancing date occurs. The Index rebalances quarterly.
In addition to SMOG, VanEck also offers the VanEck Vectors Green Bond ETF (NYSE: GRNB), the first ETF to provide targeted exposure to the U.S. dollar-denominated green bond market.
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