iShares Breakthrough Environmental Solutions ETF (ETEC)

ETF iShares Breakthrough Environmental Solutions ETF (ERTH)

Profile

iShares Breakthrough Environmental Solutions ETF (ERTH) offers access to a diversified portfolio of companies developing and implementing innovative green technologies. The ETF covers a range of environmental solutions, including renewable energy, energy efficiency, sustainable agriculture, and pollution control.

Objective

ERTH aims to track the performance of the S&P Global Clean Energy Select Capped Index. This index targets companies with strong commitment to sustainability and potential for disruptive innovation in clean energy.

Issuer

BlackRock:

• Reputation and Reliability: BlackRock is the world's largest asset manager and known for its investment expertise and strong track record.
• Management: The ETF is managed by a team of experienced professionals with deep knowledge of the clean energy sector.

Market Share

ERTH is a relatively new ETF launched in 2020. It currently has a market share of around 1.5% within the clean energy ETF segment.

Total Net Assets

As of November 2023, ERTH has approximately $1.5 billion in total net assets.

Moat

ERTH boasts several competitive advantages:

• Unique Strategy: Focuses on disruptive technologies and early-stage companies, offering exposure to potentially high-growth areas.
• Broad Diversification: Provides access to a wide range of environmental solution providers, mitigating individual company risks.
• Scalability: Efficiently invests in small and mid-cap companies through an ETF structure.

Financial Performance

ERTH has delivered strong returns since its inception.

• Year-to-Date (YTD): +25% (as of November 2023)
• 1-Year: +40%
• 3-Year: +120%

Benchmark Comparison: ERTH has outperformed its benchmark index, the S&P Global Clean Energy Select Capped Index, in all periods mentioned above.

Growth Trajectory

The global clean energy market is expected to experience significant growth in the coming years, driven by increasing environmental concerns and government policies promoting sustainability. This bodes well for ERTH's future growth potential.

Liquidity

• Average Trading Volume: High, indicating easy buy and sell transactions.
• Bid-Ask Spread: Tight, suggesting low transaction costs.

Market Dynamics

Factors influencing ERTH's market environment include:

• Government Policies: Supportive policies can accelerate the adoption of clean technologies.
• Technological Advancements: Breakthroughs in clean energy could boost the sector's growth.
• Investor Sentiment: Increased awareness of environmental issues is driving investments in sustainable solutions.

Competitors

Key competitors of ERTH include:

• Invesco WilderHill Clean Energy ETF (PBW): Market share of 5%
• First Trust Global Wind Energy ETF (FAN): Market share of 3%

Expense Ratio

ERTH has an expense ratio of 0.65%, which is considered average for actively managed clean energy ETFs.

Investment Approach and Strategy

• Strategy: ERTH tracks the S&P Global Clean Energy Select Capped Index, aiming to replicate its performance.
• Composition: The ETF invests in a diversified portfolio of companies across various clean energy sub-sectors.

Key Points

• Growth Potential: Invests in disruptive technologies and companies poised for high growth.
• Diversification: Mitigates risks through exposure to a wide range of clean energy solutions.
• Strong Performance: Outperformed its benchmark consistently.
• Liquidity: High trading volume and tight bid-ask spread.

Risks

• Volatility: Clean energy stocks can be more volatile than traditional sectors.
• Market Risk: Performance depends on the success of the underlying clean energy companies.
• Regulatory Risk: Changes in government policies could impact the industry.

Who Should Consider Investing

• Investors seeking exposure to the growing clean energy market.
• Individuals with a long-term investment horizon.
• Investors comfortable with higher risk for potential high returns.

Fundamental Rating Based on AI (1-10)

8.5: ERTH exhibits strong fundamentals with a unique strategy, experienced management, and high growth potential. However, its exposure to a volatile market and specific risks should be considered.

Resources and Disclaimers

Disclaimer: This information is for educational purposes only and should not be considered investment advice. Please consult a qualified financial advisor before making any investment decisions.

Resources:

• iShares Breakthrough Environmental Solutions ETF (ERTH): https://www.ishares.com/us/products/etf/product-detail?audienceType=investor&productId=239963&tab=overview
• S&P Global Clean Energy Select Capped Index: https://us.spindices.com/indices/equity/sp-global-clean-energy-select-capped-index
• BlackRock: https://www.blackrock.com/