The Harbor Energy Transition Strategy ETF (RENW), which began trading on the NYSE on July 14 and carries an 80 basis point expense ratio, offers investors broad exposure to the energy transition through commodity futures. RENW seeks to provide investment results that correspond to the performance of the Quantix Energy Transition index, which was developed by Quantix Commodities, also the fund’s subadvisor.
“We believe that commodities are still an under-represented part of advisor’s asset allocation, whether for inflation hedging purposes or for gaining broad exposure to the accelerating energy transition and will become an increasingly important consideration for advisors,” Quantix said in a statement to VettaFi.
The index tracked by RENW includes those commodities used in the net-zero end state (such as industrial metals and precious metals), those commodities that will be used as transition fuels (such as natural gas and oilseeds), as well as the mechanism for pricing carbon during the transition (such as emissions), Quantix said.
Since the theme is a global movement, the index includes commodities from the U.S., Europe, and the U.K.
“We believe that this significant macro trend in the medium term has the potential to impact whole portfolio asset allocation decisions and is an important topic for advisors to understand,” Quantix said.
The fund invests in commodity futures as opposed to equities due to the uncertainty of the end state of the transition.
“New technologies and companies will emerge along the way, which presents a potential risk to equity investors in the companies in the space,” Quantix said. “However, since there is only one periodic table, commodity futures offer exposure to the building blocks of the Energy Transition. The index incorporates diversification considerations using the Quantix team’s experience and expertise in index design.”
This is the second fund this year that Harbor has partnered with subadvisor Quantix to launch. The All-Weather Inflation Focus ETF (HGER), which is designed to be a solution for advisors seeking to hedge inflation, launched in February
Harbor Capital has a long history of identifying and partnering with specialists in investment management. Harbor said it identified Quantix as a stand-out specialist in commodities trading and investment management through a rigorous evaluation process.
“We are thrilled to be partnering again with Don Casturo and his team. Their background and extensive experience investing, trading, and developing innovative commodities strategies at Quantix and previously at Goldman Sachs helps make them the ideal partner in managing both [HGER] and our latest offering, [RENW],” a spokesperson for Harbor said.
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