As Earth is getting hotter, net-zero economy has become a common goal shared by governments worldwide. To help investors grasp opportunities for net-zero business, CTBC Investments issued the Green Energy and Electric Vehicle ETF, which has recently been approved for public offering by the relevant authorities. Being the first to launch an ETF that targets both renewable energy and electric vehicle (EV) trends in Taiwan, CTBC has seized the “trillion-dollar” business opportunity of green transformation and EV boom.
Shih Lin Chang, the fund manager of CTBC Green Energy and Electric Vehicle ETF, specified that according to data compiled by the Ministry of Economic Affairs, the share of renewables in electricity generation in Taiwan was 9% in 2020, a YoY growth rate of more than 80%. With the government’s support, the share is expected to jump to 20% by 2025. By then, investments from the Taiwanese government and foreign institutional investors will total more than NT$5 trillion (US$179.5 billion).
Chang added that the EV market—playing an indispensable role in developing renewable energy policies—has gone viral among investors. While the US and European governments proposed agendas with exact phase-out dates of fossil fuel vehicles, most countries plan to ban new gas cars by 2030. With an estimated CAGR of 25% by 2030, the green vehicle market is forecast to thrive quickly, where global sales of cars run by renewables is likely to surpass that of fossil fuel vehicles before the year of 2030.
Taiwan, as Chang suggested, has long been a hub of global electronics OEMs since the 1990s. Taiwanese businesses have followed every technological trend from computer to cellphone outsourcing production. Having ruled the entire electronics supply chain for three decades, the island gave birth to several electronics giants. Taiwanese businesses are often seen in the EV supply chain, from providers of charging systems, vehicle mounted displays, power systems to manufacturers of automotive electronics. Along with the recently established MIH Open EV Alliance, EV-related suppliers in Taiwan have arguably built a national EV team, which increases their chance of becoming multinational Tier 1 companies.
CTBC’s ETF tracks the Taiwan Listed and OTC Green Energy and Electric Vehicle Index released by Taiwan Index Plus. Focusing on the growing trends of renewable energy and EVs, the index comprises companies from the renewable energy, EV, and semiconductor industries and determines the portfolio based on each company’s liquidity, financial quality (sum of ROEs in the last 12 quarters must be ≥0), and corporate governance evaluation results.
With a global call for carbon emission reduction and support of relevant policies, the renewable energy and EV markets in Taiwan are likely to soar. Under such circumstances, investors can directly engage in energy and transport revolutions and explore great investment opportunities by buying CTBC Green Energy and Electric Vehicle ETF. As Taiwan Index Plus reported, the ETF’s annualized rate of return between May and July 2021 was a stunning 20.3%.
(Source of first image: pixabay)