New ETF focuses on 'blue economy' of marine, freshwater resources

Advanced Drainage Systems

12/09/2023 23:28

Sept 12 (Reuters) - Rockefeller Asset Management and
KraneShares on Tuesday announced the launch of an
exchange-traded fund (ETF) focusing on the so-called "blue
economy," which seeks to develop marine and freshwater resources
and manage them in a sustainable way.
    The KraneShares Rockefeller Ocean Engagement ETF (KSEA)
 KSEA.P  plans to invest in aquaculture, waste management,
commercial fishing, renewable energy and logistics companies
globally that seek to improve the health of the world's oceans,
the firms said in a press release. 
    KSEA did not respond to a request for further comment.
    There are a handful of other ETFs seeking to profit from the
evolution of a "blue economy," but their assets are modest.
    The largest, according to Morningstar, is the IQ Clean
Oceans ETF  OCEN.P , launched nearly two years ago, which now
has $4.6 million in assets. Newday Ocean Health ETF  AHOY.P 
(AHOY) made its debut in June 2022, and has some $2 million in
assets. 
    A third fund, Breakwave Sea Decarbonization Tech ETF,
launched in September 2021 but closed its doors in July 2023 and
plans to liquidate.
    Analysts say retail demand for "blue economy" funds is still
in the embryonic stage, but interest in the area is growing, led
by institutional investors.
    A European Commission report published this year polled 87
institutions and found that 76 planned to invest an average of
124.5 million euros  ($133.90 million) in this niche by 2030.
    On its launch, KSEA's largest portfolio holdings included
stakes in Waste Management  WM.N , Berry Global Group  BERY.N ,
a plastics manufacturer whose stated goal is to develop
sustainable products, Advanced Drainage Systems  WMS.N , a
provider of water management solutions and grocery retailer
Albertsons  ACI.N .
    Total annual fund operating expenses will total 0.86%,
according to the prospectus.
    KraneShares is a division of Krane Funds Advisors, LLC, an
investment management firm that emphasizes China-related
products, ETFs offering investment opportunities tied to carbon
reduction and climate change, and uncorrelated strategies. China
International Capital Corp acquired a majority stake in
KraneShares in 2017.     
    Rockefeller, which has ties with an array of non-profit
organizations such as the Ocean Foundation, will be the
subadviser for the fund. 
($1 = 0.9298 euros)

 (Reporting by Suzanne McGee; Editing by Ira Iosebashvili and
Jamie Freed)
 ((Ira.Iosebashvili@thomsonreuters.com;))