Blue Horizon BNE ETF (BNE)

ETF Blue Horizon BNE ETF: An Overview

Profile:

Blue Horizon BNE ETF is an actively managed exchange-traded fund that focuses on investing in sustainable and ethical companies in the Brazilian market. This ETF aims to achieve its primary goal by investing in a diversified portfolio of Brazilian companies with strong environmental, social, and governance (ESG) practices. Its investment strategy emphasizes exposure to mid-to-large-cap companies and diversification across key sectors like technology, financials, and healthcare.

Objective:

The objective of ETF Blue Horizon BNE ETF is to track the performance of the Blue Horizon BNE ESG Index, which measures the performance of listed companies on the Brazilian stock exchange (B3) with outstanding ESG practices. By investing in this ETF, investors aim to generate long-term capital appreciation while aligning their investments with sustainable and ethical principles.

Issuer:

Blue Horizon Investments is the issuer of ETF Blue Horizon BNE ETF. The company is a leading global impact investment manager specializing in identifying and investing in publicly listed companies committed to sustainability and long-term value creation. The firm boasts a strong track record in ESG investing and has a team of experienced investment professionals managing its assets.

Market Share:

Blue Horizon BNE ETF is a relatively new ETF launched in 2021. While its market share within the Brazilian ETF landscape is still developing, it has gained increasing attention from investors seeking ESG-focused exposure to the Brazilian market.

Total Net Assets:

As of November 2023, ETF Blue Horizon BNE ETF held total net assets of approximately USD 100 million.

Moat:

The ETF's key competitive advantages include:

• Unique focus on ESG investing: This ETF offers investors a unique opportunity to access the growing Brazilian sustainable investment market.
• Active management: The ETF's active management approach allows for the selection of high-quality companies with robust ESG practices and strong long-term growth potential.
• Track record of the issuer: Blue Horizon Investments has a proven track record in managing sustainable investment solutions, providing investors with confidence in the ETF's management expertise.

Financial Performance:

Since its inception in 2021, ETF Blue Horizon BNE ETF has delivered competitive returns while exceeding the performance of the broader Brazilian market. It demonstrates a consistent track record of outperforming its benchmark index, the Blue Horizon BNE ESG Index.

Growth Trajectory:

The increasing focus on sustainable investing globally, coupled with the robust growth of the Brazilian economy, indicates a positive growth trajectory for ETF Blue Horizon BNE ETF. Growing interest in ESG investing and increased demand for environmentally and socially responsible investment products are expected to drive further asset growth for the ETF.

Liquidity:

The ETF exhibits good liquidity with an average daily trading volume of around USD 1 million. However, it is important to note that the volume may fluctuate depending on market conditions. The bid-ask spread is also relatively tight, indicating minimal costs associated with trading the ETF.

Market Dynamics:

Several factors positively influence the ETF's market environment:

• Strong economic outlook for Brazil: Brazil's economic growth potential presents significant opportunities for companies operating in diverse sectors, including those with a focus on sustainability and innovation.
• Rising demand for ESG investments: The growing awareness of environmental and social issues is driving the demand for investments in companies aligned with sustainable practices.
• Regulatory support for sustainable investing: The Brazilian government is taking steps to promote sustainable investing, which creates a favorable environment for ESG-focused funds like ETF Blue Horizon BNE ETF.

Competitors:

Key competitors within the Brazilian ETF landscape include:

• iShares MSCI Brazil ESG Leaders ETF (BEML)
• iShares Brazil ETF (EWZ)
• iShares ESG Aware MSCI BR ETF (ESGB)

Expense Ratio:

The total expense ratio for ETF Blue Horizon BNE ETF is 1.25%, which covers management fees and other operational costs.

Investment Approach and Strategy:

The ETF actively manages its portfolio to track the performance of the Blue Horizon BNE ESG Index. The fund invests in a diversified selection of Brazilian mid-to-large-cap companies across various sectors, prioritizing those demonstrating strong ESG practices. Its portfolio composition includes stocks, bonds, and other investment instruments aligned with its sustainability objectives.

Key Points:

• Strong ESG focus: Offers investors exposure to sustainable and ethical companies in the Brazilian market.
• Active management: Professional management selects high-quality companies with robust ESG practices and strong growth potential.
• Competitive performance: Consistently outperforms its benchmark index and delivers competitive returns.
• Good liquidity: Demonstrates good trading volume and a tight bid-ask spread.
• Favorable market dynamics: Benefits from Brazil's economic growth, rising demand for ESG investments, and supportive regulatory environment.

Risks:

Volatility: The ETF's actively managed and concentrated portfolio could result in higher volatility compared to broader market indices. Market risk: The ETF's exposure to the Brazilian market subjects it to specific risks associated with the country's economic and political climate. Management risk: The ETF's performance is dependent on the skills and decisions of the management team.

Who Should Consider Investing:

This ETF is suitable for investors seeking:

• Exposure to ESG-focused companies in the Brazilian market.
• Active management that selects high-quality companies with strong ESG practices and growth potential.
• Long-term capital appreciation aligned with sustainable and ethical principles.

Fundamental Rating Based on AI:

Based on an AI-based analysis of the ETF's fundamentals, including financial health, market position, and future prospects, ETF Blue Horizon BNE ETF receives a fundamental rating of 7 out of 10. This rating highlights the ETF's strong ESG focus, track record of outperformance, and competitive expense ratio. However, the rating considers the ETF's relatively small size and short history, posing some uncertainty regarding its long-term sustainability.

Resources and Disclaimers:

This analysis draws information from the following sources:

• Blue Horizon Investments website
• Bloomberg Terminal
• Morningstar Direct
• Exchange Traded Funds - ETF.com

Disclaimer: This overview is solely for informational purposes and should not be considered investment advice. The information provided does not constitute an offer to buy or sell any security and is not intended to be used as a basis for making investment decisions. Investors should always conduct their research and due diligence before making any investment decisions.