New energy ETF launch led by team at Blue Horizon Capital
New ETF index provider, Blue Horizon Capital, working with Exchange Traded Concepts, is launching the Blue Horizon BNE ETF, focusing on the new energy economy.
Govind Arora (pictured), Partner and President of Blue Horizon and John Mitchell, Partner and Head of Thematic Strategy with the firm, come from the new energy industry and their launch ETF will be tracking the performance and yield of their Blue Horizon New Energy Economy 100 Index, a rules-based global index of 100 companies designed to disrupt and benefit from the shift to the New Energy Economy. It is designed to offer the broadest and most complete exposure to the New Energy Economy a multi-decade theme already driving innovation in energy production, distribution, storage and use.
Mitchell has 30 years of experience in new energy having previously been President for Albemarle Corporation’s Lithium and Advanced Materials business, where he was a thought leader in energy materials and energy storage developments, and prior to that held senior roles in corporations that focused on hydrogen, private utility supply schemes, energy efficiency applications and biogas recovery.
Arora was Chief Commercial Officer with Albemarle, for the firm’s lithium business working with global leaders in energy storage, prior to joining Blue Horizon. He was previously President of Stanley Black & Decker’s Latin American Group, CFO for Stanley Black & Decker’s Global Emerging Markets business and CFO for Honeywell’s Process Solutions business in Asia, based out of China.
Mitchell says: “We are industry guys who have spent our whole lives in the new energy economy, anything from how energy is generated, distributed and used. We have travelled and talked to heads of large multi-nationals or heads of state about advances and opportunities in the new energy economy.
“We found that there was nothing out there that was constructed appropriately for the exposure we wanted, which was broad-based exposure to the theme, so we built an ETF to give that exposure to investors.”
He describes the ETF as having ‘a thoughtful construction’ capturing the major developments and innovations across all five segments and 25 sub-segments of the new energy economy. The five segments are: E-Mobility, including electric vehicles, enabling technologies and e-tools; Energy Storage, including batteries, components, hydrogen, and battery recycling; Performance Materials, including lithium, nickel and rare earths; Energy Distribution, including smart grid technology and charging infrastructure and Energy Generation, including solar, wind, biomass and fuel cells.
“We have a proprietary scoring system that focuses on leadership and innovation in those segments,” he says.
“We think that this is a different type of product because generally if investors are aware of the sector, they tend to invest on the bookends.”
What that means, Arora explains, is a focus on how energy is being produced, such as through solar technology, and how energy is being used, such as in electric cars. “That approach misses much of the innovation taking place in storage, distribution and efficiency of final energy delivery,” he says.
Mitchell says: “We are really excited about the construction of the portfolio and framework and folks will see it’s thoughtfully constructed giving the exposure they are looking for, with lower risk and volatility than some more concentrated funds out there.”
The team describes the fund as being thematic with a focus on global growth, while also being ESG friendly.
BNE is launching on the NYSE, trading names across 25 different global exchanges, with fees of 87 bps.