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Global Decarbonisation Monthly Report | January

Introducing our climate change ETF

2020 - A Year in Review 

  • According to the International Energy Agency (IEA), renewable energy installed capacity increased by 200 GW (a 4% growth), with the US and China being the two countries adding most new projects.[1] Almost 90% of the new generation capacity added in the year comes from renewable sources, with 10% still being powered by gas and coal. From 2010 to 2020 IEA estimates that solar capacity increased 18x while wind power increased 4x. The same report projects that India and the EU will be driving even stronger growth in 2021.[2]
  • Covid-caused confinement policies have caused a transitory emissions reduction. The ICOS estimates that CO2 emissions fell by ~7% in 2020. This is expected to be a short-lived drawdown. In China, upon relaxation of measures, emissions increased back.[3]
  • In September, President Xi Jinping announced that China committed to reach carbon neutrality by 2060. As the world’s biggest emitter of CO2e, the announcement is a truly relevant one. The pledge was surprisedly announced at the UN General assembly.[4]
  • Countries like China, Japan, Norway, Spain and France already banned fossil fuel vehicles. In 2020 important markets have made similar commitments: in September California banned ICE sales from 2035, in October New York State banned sales of ICEs from 2035 and in November the UK announced the ban from 2030.

 

iClima Global Decarbonisation Enablers Index Performance

December

12 Month*

11.84%

83.51%

Past performance is no guarantee of future performance.

Source: Bloomberg, Solactive, HANetf *TNR Index, in USD. 12 Month figures based on 2.01.20 -31.12.20. December 

 

Performance Review

Breakdown of Annual Performance

  • Our climate change ETF's Green Energy sector was up 17.6% in the year, with the Renewable Energy Equipment sub-section up approximately 11% followed by Renewable Energy Assets by approximately 5%.
  • The Green Transportation sector was up 34.8% in the year with the EV & Bikes sub segment being up 34.2%.
  • The Sustainable Products sector was up 12.6% in the year, with Sustainable Buildings, Telepresence, and Efficient Materials & Processes being the leading subsegments.
  • The Enabling Solutions sector was up 16.05% in the year with the Fuel Cell being the best performing subsegment.
  • Water & Waste Improvements was up 1% in the year.

Source of all data: iClima/ Bloomberg 

 

The Distribution of the Shares Performance

CLMA is currently comprised of 151 shares. In 2020, 17 companies had a negative share performance, 43 were between 0% and 30%, and 91 companies were above 30%. Notably, 39 companies had shares going up between 120% and 1,200% during the year.

Source: iClima/ Bloomberg

 

iClima Global Decarbonisation Enablers Performance Table

As of 31.12.20

 

1M

3M

6M

YTD

12M

SI

iClima Global Decarbonisation Enablers UCITS ETF (Acc)

11.76%

-

-

11.76%

-

11.76%

iClima Global Decarbonisation Enablers Index

11.84%

37.19%

70.87%

83.51%

83.51%

11.84%

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. Source: Bloomberg / HANetf. Data as of 31/12/2020

 

Noteworthy Company News & Share Performances in 2020

NIO Inc (NIO, up 1,173%) Often called the “Tesla of China”, NIO Inc has benefited from fiscal stimulus from the Chinese government in its attempt to boost sales of EVs. Until November 2020, EV sales in China reached 1.1 Million units, up 4% year-on-year.[5] Nio’s Battery-as-a-Service subscription model seems to set it apart and allowed for year-on-year sales growth over 100%.[6]

Plug Power (PLUG, up 949%) The Upstate NY manufacturer of hydrogen fuel cells for the electric mobility and stationary power markets is benefiting from the expected relevance of green hydrogen as a climate change solution. The company made two acquisitions during the year (of United Hydrogen Group, a H2 producer, and Giver ELX, a cost-efficient producer of H2 generators) that led management to boost is 2024 sales forecast to $1.2 Billion and EBITDA to $250 Million.[7]

Tesla (TSLA, up 696%) The 17-year-old Californian company was constantly in the spotlight in 2020. It closed the year almost at almost 500k EV units sold, a 36% year-on-year increase.[8] The company is building two new vehicle assembly operations in Berlin and Austin which are expected to start operation by end of 2021, adding to the production in Fremont (CA) and Shanghai.[9]

Workhorse Group (WKHS, up 544%) The Ohio based maker of electric commercial cargo vans and drones began targeting the “last mile package delivery” segment. The $6 billion contract to renovate the US Postal Service delivery truck fleet was postponed to later in 2021, minding that targeted truck production for 2021 is 1,800 vehicles. In October they filed for Federal Aviation approval of its drone integrated to EV product, which may be granted approval in 2021.[10]

Zoom Video Communications (ZM, up 401%) Not a household name before the COVID crisis, the company was in position to become a WFH solution and 3Q20 revenue soared 367% Year-on-year, with net income increasing 11-fold.[11] In December 2019, Zoom had 10 million daily VC participants, which grew to 300 million by April 2020. The end of the pandemic may reduce demand, but the long-term trend of WFH is expected to persist.

Alfen Beheer (ALFEN, up 401%) The Dutch smart grid solutions provider saw very solid revenue growth in 2020. 3Q20 sales grew 46% year-on-year, with smart grids revenue up 23%, EV charging revenue up 72% and energy storage sales up 488%. Gross margin reported at 37.2%.[12]

SunRun (RUN, up 383%) The California residential sunroof is the largest installer and owner of rooftop solar systems in the USA. Its battery storage system, launched in mid-2019, has experienced fast growth in the year and the company maintained its first mover advantage in the Virtual Power Plant as a grid service. The acquisition of rival Vivint in July is expected to improve sales growth.[13]

Sunnova Energy (NOVA, up 292%) In December, the direct competitor to SunRun raised capital via an equity offering to acquire further solar equipment.[14]

HelloFresh (HFG, up 229%) Berlin based meal kit delivery company saw a 120% revenue increase in 3Q20 vs 3Q19 sales and the number of active customers reached an all-time high of 5 million.[15]

Siemens Gamesa (SGRE, up 115%) and Vestas (VWS, up 122%) both benefited from tail winds for the wind turbine market. Siemens Gamesa sales growth puts it on track to dethrone Vestas as the top wind turbine installer by 2025.[16]

Resideo Technologies (REZI, up 77%) The Honeywell International spin off saw demand for residential thermal and comfort products soar.[17]

Uber Technologies (UBER, up 63%) The pandemic reduced mobility bookings by 50% in 3Q20 vs 3Q19, but delivery gross bookings grew by 135% year-on-year.[18] In September, it committed $800 Million to help drivers transition to EV by 2025 and to 100% EV rides in the US, EU and Canada by 2030.[19]

 

Outlook for 2021

  • Eyes on the US in January: On January 5th, Georgia will vote on two Senatorial seats and on January 20th Biden will be inaugurated as the 46th President of the United States. If both Democratic Senator candidates win, there will be a tie between both parties and any ties on votes would be broken by Vice President elect Harris. These Senate seats will determine if the new administration will have the votes required in both upper and lower houses to pass Biden’s most progressive legislation.
  • More clarity on the US path in February: Biden has also promised to re-join the Paris Agreement shortly after the inauguration. We expect to see definition in terms of the climate change agenda that the new administration will pursue vis-à-vis the outcome of the Georgia election. Biden ran the campaign saying he would not support the Green New Deal.
  • Defining moment with EU Parliament in June: EU leaders have agreed to a 55% GHG reduction target by 2030 but European Parliament is pushing for a 60% reduction.[20]
  • UN will host COP26 in November: During the first two weeks of the month, leaders will meet in Glasgow for what is expected to be the most important COP since the Paris Agreement in 2015. Leaders will report back on their 5-year progress. The UK will be chairing the G7 group and it is expected to focus on the post Covid recovery on a green agenda.

 

Product Details

iClima Global Decarbonisation Enablers UCITS ETF (CLMA), is a UCITS compliant Exchange Traded Fund domiciled in Ireland. This is the world’s first climate change ETF that provides exposure to the performance of companies offering products and services that enable CO2e avoidance. CLMA is unique because it shifts the focus from companies’ emission reduction actions, to companies offering products and services that directly enable CO2e avoidance solutions and shines a spotlight on climate change innovators.

CLMA tracks the iClima Global Decarbonisation Enablers Index, an Index designed to measure the performance of securities from five sub-sectors including green energy, green transportation, water and waste improvements, decarbonisation enabling solutions and sustainable products. Please remember that the value of your investment may go down as well as up and that past performance is no guarantee of future performance

Exchange  Bloomberg Code  RIC  ISIN  SEDOL  Currency  TER 
London Stock Exchange CLMA LN CLMA.L IE00BNC1F7287 BLF0M50  USD 0.65%
 London Stock Exchange CLMP LN CLMP.L  IE00BNC1F7287 BLF0M83  GBP 0.65%
 Deutsche Boerse Xetra ECLM GY ECLM.DE  IE00BNC1F7287 BN93X89  EUR 0.65%
Borsa Italiana CLMA IM CLMA.MI  IE00BNC1F7287 BN93X78  EUR 0.65%

 

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