Cleaner Living Monthly Report | December

05 January 2022

Cleaner Living ETF Monthly Report: Key Takeaways

  • While there were individual names that did well in November the overall index was down 8.29%, giving back much of the October 10.81% gain. [1] As the world gets a better handle on the Omicron variant, we expect this short-term volatility to ease. [2] 
  • A U.S. led plan to release strategic oil reserves helped ease oil price pressures and putting pressure on solar power names helped the Cleaner Energy segment contribute to 42% of the month’s returns. These same pressures bled into Cleaner Building & Infrastructure names with energy focus with that segment contributing to approximately 22% of period returns. [3]
  • Kura Sushi (KRUS-US) was the top contributor to performance posting a 49.37% in November on a strong Q4 and overall 2021 earnings report based on a roughly 500% increase in year over year sales and a Q4 operating loss that went from $6.8 million in 2020 to $800,000 in 2021. [4]
  • Cleaner Building & Infrastructure name Trex (TREX-US) followed Kura Sushi as the second highest contributor to returns on a strong reported Q3 earnings posting a 45% increase in sales due to what the company described as “robust repair and remodel activity.” [5]

Please note that all performance figures are showing net data.

 

Macro Outlook

The main driver of this strategy is the structural change that is unfolding in consumer’s preferences and spending for what they are putting both in and on their bodies as well as the environmental impact of using these goods and services. This shift is prompting corporations to begin to adjust positioning, product lines and production that better reflect consumer preferences and values, what is more environmentally sound, and where public policy is heading. [6] As thematic investors, we break the economy into three components: consumers, corporations, and public policy. When we see consumers and corporations pulling in the same direction, we know we have a solid investing theme. When public policy joins them, setting performance thresholds or providing development incentives, all three are moving in the same direction, creating powerful thematic tailwinds, which is precisely what we see with Cleaner Living.

In Europe, great emphasis has been placed on guiding pandemic-recovery stimulus funds towards incentives and projects that will increase demand for the types of products and services that are in the Cleaner Living investment theme. [7] The same is occurring in much of North America, such as with US President Biden’s proposals in which spending plans are earmarked for Cleaner Living solutions. [8] Other confirming signals supporting this theme include the early November IPO of “Green” shoe manufacturer AllBirds as well as the incoming German government’s pledge to phase out internal combustion engine powered vehicles by 2030 and get 15 million EVs on the road by then. [9]

We may continue to be optimistic that current supply chain woes will be resolved in the coming quarters. While the rise of the omicron variant has created yet another unknown, initial indications are that while this variant is more transmissible the effects so far seem to indicate a relatively muted effect on affected individuals. [10] This resolution may be beneficial to a number of sectors especially Building & Infrastructure and Transportation. Food & Dining and Health & Beauty sector names often fall into a traditional Consumer Staples sector and given consumers’ willingness to spend on healthier and “better for them” food and products we may continue to see some resilience in these sectors in the near-term.

 

Cleaner Living ETF Performance (As of 30.11.21)

1M

3M

6M

YTD

12M

SI

Cleaner Living ESG-S UCITS ETF

-8.30%

NA

NA

-4.35%

NA

-4.35%

Tematica Bita Cleaner Living Sustainability Screened Index

-8.29%

-4.90%

-8.48

-4.24%

-3.16%

-4.24%

 

Please note that all performance figures are showing net data. Source: Bloomberg / HANetf. Data as of 30/11/2021
Performance before inception is based on back tested data. Back testing is the process of evaluating an investment strategy by applying it to historical data to simulate what the performance of such strategy would have been. Back tested data does not represent actual performance and should not be interpreted as an indication of actual or future performance. Past performance for the index is in USD. Past performance is not an indicator for future results and should not be the sole factor of consideration when selecting a product. Investors should read the prospectus of the Issuer (“Prospectus”) before investing and should refer to the section of the Prospectus entitled ‘Risk Factors’ for further details of risks associated with an investment in this product. Please note that all performance figures are showing net data.

 

Learn more about our Cleaner Living ETF

Download the PDF

Sign Up to Insights

Tell us how we can help