New index captures both the established leaders and emerging companies and themes reshaping the low carbon energy ecosystem
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.
VanEck has a history of looking beyond the financial markets to identify trends that are likely to create impactful investment opportunities. We were one of the first U.S. asset managers to offer investors access to international markets. This set the tone for the firm’s drive to identify asset classes and trends – including gold investing in 1968, emerging markets in 1993, and exchange traded funds in 2006 – that subsequently shaped the investment management industry.
Today, VanEck offers active and passive strategies with compelling exposures supported by well-designed investment processes. As of March 31, 2021, VanEck managed approximately $71.2 billion in assets, including mutual funds, ETFs and institutional accounts. The firm’s capabilities range from core investment opportunities to more specialized exposures to enhance portfolio diversification. Our actively managed strategies are fueled by in-depth, bottom-up research and security selection from portfolio managers with direct experience in the sectors and regions in which they invest. Investability, liquidity, diversity, and transparency are key to the experienced decision-making around market and index selection underlying VanEck’s passive strategies.
Since our founding in 1955, putting our clients’ interests first, in all market environments, has been at the heart of the firm’s mission.
An investment in the its VanEck Vectors Low Carbon Energy ETF may be subject to risks which include, among others, investing in low carbon energy companies, investing in European issuers, foreign securities, foreign currency, depository receipts, utilities, consumer discretionary, industrials and sector, information technology sectors, utilities sector, small- and medium-capitalization companies, equity securities, market, operational, index tracking, authorized participant concentration, no guarantee of active trading market, high portfolio turnover, trading issues, passive management, fund shares trading, premium/discount risk and liquidity of fund shares, non-diversified and concentration risks, all of which may adversely affect the Fund. Foreign investments are subject to risks, which include changes in economic and political conditions, foreign currency fluctuations, changes in foreign regulations, and changes in currency exchange rates which may negatively impact the Fund's return. Small- and medium-capitalization companies may be subject to elevated risks.
An investment VanEck Vectors Green Bond ETF may be subject to risks which include, among others, green bonds, investing in Asian, Chinese and emerging market issuers, foreign securities, foreign currency, credit, interest rate, floating rate, floating rate LIBOR, high yield securities, supranational bond, government-related bond, restricted securities, securitized/asset-backed securities, financial, utilities, market, operational, call, sampling, index tracking, authorized participant concentration, no guarantee of active trading market, trading issues, passive management, fund shares trading, premium/discount risk and liquidity of fund shares, non-diversified and concentration risks, all of which may adversely affect the Fund.
MVIS Global Low Carbon Energy Index is the exclusive property of MV Index Solutions GmbH (a wholly owned subsidiary of the Adviser), which has contracted with Solactive AG to maintain and calculate the Index. Solactive AG uses its best efforts to ensure that the Index is calculated correctly. Irrespective of its obligations towards MV Index Solutions GmbH, Solactive AG has no obligation to point out errors in the Index to third parties. The VanEck Vectors Low Carbon Energy ETF is not sponsored, endorsed, sold or promoted by MV Index Solutions GmbH and MV Index Solutions GmbH makes no representation regarding the advisability of investing in the Fund.
Index returns are not Fund returns and do not reflect any management fees or brokerage expenses. Certain indices may take into account withholding taxes. Investors cannot invest directly in the Index. Returns for actual Fund investors may differ from what is shown because of differences in timing, the amount invested and fees and expenses. Index returns assume that dividends have been reinvested.
Investing involves substantial risk and high volatility, including possible loss of principal. An investor should consider the investment objective, risks, charges and expenses of the Fund carefully before investing. To obtain a prospectus and summary prospectus , which contains this and other information, call 800.826.2333 or visit vaneck.com. Please read the prospectus and summary prospectus carefully before investing.
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Chris Sullivan/Julia Stoll