Chinese fund managers are rushing to set up wind power funds, in the latest move to capitalise on investors’ green fever, as global climate talks in Glasgow rekindle interest in China’s carbon neutrality pledge.
So far there have been more than 10 fund managers who’ve applied to set up China’s first batch of exchange-traded funds (ETF) tracking the wind power industry since last Friday, according to the country’s securities regulator.
Reuters comment that “China confirmed to the United Nations last week that it would bring its emissions to a peak before 2030 and cut them to “net zero” by 2060 – a pledge President Xi Jinping first made in 2020. China also promised to raise total wind and solar power generation capacity to 1,200 gigawatts by 2030 in order to reach its goals.”
Some of the mutual fund houses which have submitted applications include China Asset Management, GF Fund Management and Harvest Fund according to the China Securities Regulatory Commission’s (CSRC) website.
If permitted, the funds will be sure to attract investor attention from ESG conscious fund selectors in an already red-hot sector. The new energy index has almost doubled in one year as China steps up efforts to become greener.
Reuters go on to state that “there are already many ETF products tracking sub-sectors in the new energy industry, such as new energy vehicles and the photovoltaic industry, but the wind power industry ETFs would be the first ones tracking this sub-sector.”
The ETFs will be based on the CSI Wind Power Industry Index, which tracks organisations from upstream suppliers to downstream constructors and operators. That index has surged around 80% since it launched in April 2021, fuelling fears of a bubble. Analysts also said the competition will be fierce if too many similar funds are set up at the same time.
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