RNEW ETF: Question and Answer

The shift to a more sustainable future has seen increased focus globally and more pointedly in the U.S. This stems from the goal by the U.S. to become net zero carbon emissions by 2050. This focus has created opportunities for new and existing businesses to help move the U.S. closer to achieving this, which is, in turn, creating opportunities for investors. This blog is intended to address frequently asked questions about investing in green infrastructure and, specifically, the VanEck Green Infrastructure ETF (RNEW).

• What is infrastructure investing?
• What is “green” infrastructure?
• How significant is the Inflation Reduction Act on green infrastructure?
• How can investors gain exposure to green infrastructure?
• Is RNEW purely a domestic focus or is this global?
• How does green infrastructure fit within a portfolio?
• Why RNEW?
• How can investors buy VanEck ETFs?

What is infrastructure investing?

Traditional infrastructure investing is defined typically as investments in real assets such as bridges, roads, sewage, electrical or energy systems, etc., as well as companies driving development in this space. This asset class has historically focused on these areas holistically.

What is “green” infrastructure?

As we transition to a net zero carbon footprint, traditional style infrastructure assets are moving to more sustainable counterparts. Examples include green energy such as solar, wind and hydroelectric power as well as EV vehicles, more energy efficient construction, environmentally sustainable waste management and pollution control.

How significant is the Inflation Reduction Act on green infrastructure?

In August 2022, President Biden signed the Inflation Reduction Act into law. The bill allocates approximately $135B to incentivize green infrastructure initiatives, including tax credits for solar and electric vehicle purchases, grants and loans for sustainable energy capital expenditures and both grants and tax credits for a wide array of decarbonization projects.

We believe that infrastructure companies across the seven sub-themes defined in the INDXX US Green Infrastructure - MCAP Weighted Index (the Index) will be direct benefactors of this investment: green energy and fuel, green transportation, green infrastructure and equipment, pollution control, green constructions and waste management.

How can investors gain exposure to green infrastructure?

The Index defines a green infrastructure company as one that operates within one of the sub-themes listed above. In order to be eligible for inclusion in the Index, companies must derive at least 50% of their revenues from one or more of the seven outlined infrastructure sub-themes and continue to do so into the future.

VanEck Green Infrastructure ETF (RNEW) seeks to track the Index, offering investors access to companies that are involved in the production, transmission, or distribution of green energy or in business activities seeking to establish sustainable infrastructure.

Is RNEW purely a domestic focus or is this global?

RNEW is focused solely on U.S. domiciled companies; however, their green efforts may have a global impact. Currently the U.S. has a C- rating from the American Association of Civil Engineers in 2021. U.S. infrastructure is not only overstretched, but also lagging other countries, including China, Germany, Japan, U.A.E. and the U.K. There is a severe funding gap across all infrastructure sectors, which is driving the opportunity for investors.

How does green infrastructure fit within a portfolio?

RNEW is positioned to benefit from a long-term structural trend here domestically, as we shift to a more climate friendly society and economy. We believe that the green infrastructure space deserves a portion of any investor’s equity allocation—specifically, within the technology sleeve due to the nature of the companies the ETF holds. New technology and innovation will be the catalyst for growth across all of the sub-themes within RNEW, so it only makes sense that it be a portion of an equity portfolio.

Why RNEW?

Building a home using sticks and straw on an uneven dirt foundation, unsurprisingly, does not lead to a long-term stable solution for housing. Extrapolate this to a future that is highly dependent on renewable resources and reducing our nation’s carbon footprint, and it is extremely important to have an infrastructure that supports this future. This focus has led to increased investment from government on specific sectors around infrastructure.

RNEW provides exposure to companies around seven key sub-themes within the infrastructure space, from transportation and energy to construction and waste management. These themes are set to take advantage of government and private sector investment into the green infrastructure space.

How can investors buy VanEck ETFs?

Learn more here.

To receive more Sustainable Investing and Thematic Investing insights, sign up in our subscription center.