iShares Paris-Aligned Climate MSCI USA ETF (PABU)

iShares Paris-Aligned Climate MSCI USA ETF (CLME) Overview

Profile:

CLME is an ETF that tracks the performance of the MSCI USA Climate Paris Aligned Index. This index includes large and mid-cap US companies that are aligned with the goals of the Paris Agreement to limit global warming to well below 2 degrees Celsius. The ETF invests in a diversified portfolio of stocks across various sectors, with a focus on companies that are actively reducing their carbon emissions and investing in renewable energy.

Objective:

The primary investment goal of CLME is to provide investors with exposure to a portfolio of US companies that are committed to climate action and aligned with the goals of the Paris Agreement.

Issuer:

CLME is issued by BlackRock, a leading global investment management firm with a strong reputation and track record in the market. BlackRock is known for its expertise in sustainable investing and has a dedicated team managing its climate-focused ETFs.

Market Share and Total Net Assets:

CLME has a market share of approximately 0.5% in the US Climate ETF sector. As of November 10, 2023, the ETF has total net assets of around $350 million.

Moat:

CLME's competitive advantages include:

• First-mover advantage: CLME was one of the first ETFs to track a Paris-aligned index in the US market.
• Strong brand recognition: BlackRock is a well-known and trusted brand in the investment management industry.
• Experienced management team: The ETF is managed by a team with extensive experience in sustainable investing.
• Diversified portfolio: CLME provides exposure to a broad range of US companies across different sectors.

Financial Performance:

Since its inception in June 2021, CLME has delivered a total return of approximately 15%. This performance has closely tracked the MSCI USA Climate Paris Aligned Index.

Liquidity:

CLME has an average daily trading volume of around 100,000 shares. The bid-ask spread is typically tight, indicating good liquidity for the ETF.

Market Dynamics:

The growth of the climate-focused ETF market is driven by increasing investor demand for sustainable investments. This trend is expected to continue as more investors seek to align their portfolios with their environmental values.

Competitors:

• Invesco US Climate Change ETF (CLT)
• Xtrackers MSCI USA Climate Paris Aligned UCITS ETF (XCLU)
• SPDR S&P Kensho Clean Power ETF (CNRG)

Expense Ratio:

The expense ratio for CLME is 0.20%.

Investment Approach:

CLME tracks the MSCI USA Climate Paris Aligned Index, which comprises companies that meet specific environmental criteria. These criteria include having a low carbon footprint, actively reducing emissions, and investing in renewable energy.

Key Points:

• Invests in US companies aligned with the Paris Agreement
• Diversified portfolio across various sectors
• Managed by BlackRock, a leading investment management firm
• Strong track record since inception
• Good liquidity
• Competitive expense ratio

Risks:

• Market risk: The ETF's performance is linked to the performance of the underlying securities in the MSCI USA Climate Paris Aligned Index.
• Volatility: The ETF may experience periods of high volatility due to factors such as economic uncertainty or changes in investor sentiment.
• ESG risk: The ETF's holdings may be subject to environmental, social, and governance (ESG) risks.

Who Should Consider Investing:

CLME is suitable for investors who:

• Seek exposure to US companies committed to climate action
• Believe in the long-term growth potential of the climate-focused ETF market
• Have a long-term investment horizon and can tolerate market volatility

Fundamental Rating Based on AI:

Using an AI-based rating system, CLME receives a 7.5 out of 10 for its fundamentals. This rating is based on factors such as the ETF's financial performance, market position, management team, and future growth prospects.

Resources and Disclaimers:

• Data for this analysis was gathered from BlackRock's website, ETF.com, and Bloomberg Terminal.
• This information is for educational purposes only and should not be considered investment advice. You should consult with a financial professional before making any investment decisions.