Two of the forces driving the investment world in 2021 -- exchange-traded funds and clean energy -- collided last week and generated a simply extraordinary amount of money.
The BlackRock U.S. Carbon Transition Readiness ETF (LCTU), which invests in companies that are expected to profit from the move toward a low-carbon world, attracted some $1.25 billion upon launch. That made it the largest launch in the history of the ETF world, according to Financial Planning, citing data from Bloomberg.
On the same day that Blackrock unveiled LCTU, it also launched BlackRock World ex U.S. Carbon Transition Readiness ETF (LCTD), which also invests in the sustainable energy sector, according to Barron’s.
Both ETFs funds use an underlying equity index and then assign portfolio weights based upon a carbon transition readiness score, according to the Financial Times.
LCTU, LCTD and similar funds point toward a broader interest in investing in the environmental, social and governance standards (ESG) space. Sustainable investments in the U.S. hit $17.1 trillion at the start of 2020—a jump of 42% from two years prior, Barron’s reported, citing data from the US SIF trade group.
