Rize ETF has expanded its thematic range with the launch of a circular economy ETF.
The Rize Circular Economy Enablers UCITS ETF (CYCL) is listed on the London Stock Exchange and Deutsche Boerse with an ongoing charges figure (OCF) of 0.45%.
CYCL tracks the Foxberry SMS Circular Economy Enablers index which offers exposure to companies that are contributing to the transition to a circular economy under the EU Taxonomy.
To be eligible for inclusion, a company must either be involved in the direct provision of enabling products or services that are circular or involved in activities that support other businesses to enhance circularity.
Companies must also have a minimum free-float market capitalisation of $150m.
The universe was created in partnership with Sustainable Market Strategies and is based on the EU Taxonomy’s Circular Economy Action Plan 2020.
The action plan highlights seven “key product value chains” which form the basis of the ETF’s stock universe.
Electronics and ICT
Batteries and vehicles
Construction and buildings
Food, water and nutrients
The ETF focuses on companies that are circular economy enablers rather than circular economy practitioners such as Nike and Lego which only engage in implementing circular economy principles within their business models.
CYCL is classified as Article 9 under the Sustainable Finance Disclosure Regulation (SFDR).
Rahul Bhushan (pictured), co-founder and director of Rize ETF, said: “A circular economy aims to break the current linear economic cycle by prioritising waste prevention and the continuous use of resources.
“Crucially, the investment strategy focuses on the enablers of the transition to a more circular economy as opposed to companies that are merely circular economy practitioners or enabling end-of-life 'best practice' in a linear economy.”
CYCL is the firm’s first launch since it unveiled the Rize Pet Care UCITS ETF (PETZ) and the Rize Emerging Market Internet and Ecommerce UCITS ETF (EMRJ) in April 2022.
Other circular economy ETFs include: