Trash is big business. But exchange-traded fund sponsor Direxion hopes a lack of trash will be a big business all its own, and it has put that faith into a new product it launched today.

The Direxion World Without Waste ETF (WWOW) tracks the Indxx US Circular Economy Index containing companies playing on the theme of resource conservation, specifically the “three R’s” of reducing, reusing and recycling. 

But the idea is about more than recycling. It’s about fundamentally transforming the economy from something “linear” to one that’s more “circular” in the way it handles resources.

“There’s been a real focus on clean energy and recycling and the like,” said Robert Nestor, president of Direxion. “This fund fits into that category, but it’s a little more directed. The whole concept centers on this idea of a circular economy. And it’s not just recycling on the back end, but actually designing for reuse on the front end.”

The index’s constituents get at least 50% of their revenue from one of the following five sub-themes that fit this circular economy narrative:

1) They are focused on the sustainability of resources. Such companies are involved with solar, wind or hydropower energy, geothermal energy, biomass, biofuels, agriculture science or energy-efficient solutions.

2) The companies share platforms. In other words, they can boost the utilization rate of products by sharing their use/access/ownership. Such activity includes peer-to-peer lending, space/knowledge/content/talent sharing, crowdfunding, collaborative platforms and software, platforms or infrastructure as services.

3) They are involved in resource recovery. Such companies include waste management concerns that recover useful resources/energy out of disposed products or byproducts.

4) They offer products as a service. These companies’ operations are based on subscription-based revenue models.

5) They extend product life cycles. Such companies extend the working life of products and components by repairing, upgrading and reselling products or components.

The index includes the top 10 companies from each of these categories according to the largest total market capitalization. If there are fewer than 10 companies in a category, companies from the other categories would be added so the list adds up to 50.

The index is equal-weighted and rebalanced and reconstituted annually. The fund’s net expense ratio is 0.50%.

First « 1 2 » Next