BetaShares to launch energy transition fund

BETASHARES says it will launch a new product focused on the energy transition as demand for investments in critical minerals and rare earths increases.

The BetaShares Energy Transition Metals ETF is scheduled to list on the ASX in late October, the company said.

The fund will hold stocks including lithium miner Pilbara Minerals, copper focused OZ Minerals and Lynas Rare Earths, the world’s largest rare earths producer outside of China.

“The products and processes which are driving the move to a more environmentally friendly economy, such as electric vehicles and battery storage, are all critically dependent on energy transition metals,” said BetaShares chief executive Alex Vynokur.

“Reflecting the importance of these materials, many global companies and national governments are investing significant amounts of capital to guarantee supply of these critical components,” he said.

“Even with this additional investment, prices for these materials are expected to remain elevated as a result of constrained supply and often complex processing requirements.”

Australian exports of battery metals could begin to rival thermal coal revenue within a few years, according to federal government commodity forecasts released this month, as the surging lithium price turns the sector into a major earner for Australian miners and chemicals companies. Combined sales of copper, lithium and nickel are likely to hit $32bn this year, the report forecasted.

Lynas booked a record $540.8m net profit for the year to June 30 on the back of surging prices for its rare earth oxides. Prices for neodymium and praseodymium, Lynas core product from its Malaysian refinery, was up 70 to 80 per cent in the June half, compared to the same time in 2021.

The BetaShares product comes as other exchange traded fund providers are moving to capitalise on investor demand for energy transitionfocused funds.

VanEck’s Global Carbon Credits ETF listed on the ASX last week, allowing investors to gain exposure to emissions trading schemes around the world. It will track the ICE Global Carbon Futures Index.

Assets managed by ETFs stood at $124.4bn on September 30, according to data compiled by BetaShares.