Cleaner Living Monthly Report | March

08 March 2022

 Cleaner Living ETF Monthly Report: Key Takeaways

  • We believe, the broad theme of Cleaner Living continues to emerge as companies are increasingly adopting positioning and in a growing number of cases, real changes to both product mix as well as manufacturing processes. 
  • After the past few months of negative returns February saw some relief as the index gained 3.92%. [1]
  • Energy and Energy based Building & Infrastructure names drove returns this month contributing to roughly 117% of index returns. [2]
  • F45 Training (FXLV) continued to perform well posting a 22.94% return in February on a strong forecasted explosive growth as the company announced acquisition of a large amount of equipment meant to support rapid franchise expansion. [3]
  • Health & Fitness name Xponential Fitness (XON-US) also had a strong month posting a 19.93% return on similar growth prospects as corona virus restrictions continue to be lifted as we begin the transition from pandemic to endemic positioning. [1]
  • From a technical perspective the index seems to have established a double bottom pattern after testing January lows and rebounding above recent highs. [4] Given the effect on energy prices of the invasion of Ukraine and subsequent “cancellation” of Russia in the global economy our thought is that hydrocarbon-free energy sources will continue to react positively as oil prices continue to maintain levels not seen since 2014.   

Please note that all performance figures are showing net data. Past performance is not an indicator for future results and should not be the sole factor of consideration when selecting a product.

 

Macro Outlook

The main driver of this strategy could be 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. 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. 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. Other confirming signals supporting this theme include the 7th year marking the first promotion of Veganuary; [2] consumer electronic company Sony (6758) taking steps to enter the electric vehicle market; [3] China including the goal of developing lab-grown meat as a policy position in their latest agricultural five-year plan. [4]

We continue to be optimistic that current supply chain woes will be resolved in the coming quarters. While the rise of omicron variant BA.2 has created yet another unknown, initial indications are that while this variant is more transmissible the effects seem to be relatively muted for affected individuals. [5] This resolution should be beneficial to a number of sectors especially Food & Dining and Health & Beauty sector names. Given consumers’ willingness to spend on healthier and “better for them” food and products we continue to see some resilience in these sectors in the near-term. 

 

Cleaner Living ETF Performance (As of 28.02.22)

1M

3M

6M

YTD

12M

SI

Cleaner Living ESG-S UCITS ETF

3.86%

-17.48%

NA

-10.43%

NA

-21.07%

Tematica Bita Cleaner Living Sustainability Screened Index

3.92%

-17.12%

-21.18%

-10.37%

-31.97%

-20.63%

Please note that all performance figures are showing net data. Source: Bloomberg / HANetf. Data as of 28/02/2022

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.

 

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