There is a significant need for greater investments into commodities that are fostering a global transition to net-zero carbon emissions, according to two commodities experts.

The world is involved in a major transition from high-carbon emission technology and it is unclear how this transition is expected to occur, but it is the biggest transition the world has embarked on since the world phased out whale oil in the latter half of the 19th century as a source of energy, according to Kristof Gleich, president and chief investment officer of Chicago-based Harbor Capital Advisors.

Harbor, along with Greenwich, Conn.-based Quantix Commodities, held a joint online event today where they discussed the transition and the launch of a new exchange-traded fund (ETF) that tries to capture this burgeoning market.

“The world is currently undergoing its second large general energy transition in the past 200 years,” Gleich said.

With moves toward less carbon emissions, there will be a greater demand for metals and minerals, as these products are used more within electric cars and other similar machines than in a traditional internal combustion engines. Currently, there is a lack of capital in industries that support the energy transition, he said.

“[The transition] will be difficult,” Gleich said. “It’s not going to happen in a straight line or a smooth line.”

To facilitate investments into this space, he suggested investments are needed in three crucial areas. The first are commodities such as minerals and steel that will help make the new products. The second will be in bridge fuels that will keep things running during the transition, and finally investments in incentivizing the markets to get on board with the transition.

A reason for the lack of investment in this commodities space is there are not many tailored investment options. Don Casturo, the founder and chief investment officer of Quantix, said the industry is in need of something to act as a transition.

“The need for pioneering financial and innovative financial products in the commodities space is greater than ever,” he said.

To that end, Quantix and Harbor Capital announced the launch of the Harbor Energy Transition Strategy ETF (RENW). The fund will track the Quantix Energy Transition Index, which is a new index created by Quantix.

First « 1 2 » Next