Experts on decarbonisation; EV charging; and the digital revolution weigh in on their outlook for the rest of 2023

  • Gabriela Herculano Konrad Sippel and Anthony Ginsberg provide an insight into the year so far and what could lie ahead for clean energy transport and the digital revolution.
  • While rising interest rates remain a threat Herculano believes that clean energy stands to benefit in the medium to long-term.
  • Now that the EU has reached a consensus on how to phase out combustion engines EV charging infrastructure will have to expand to meet the demand for clean transportation.
  • The digital revolution is poised to benefit from the reopening of China and the continued trend of working from home.

April 2023 London

HANetf Europe’s first and only independent white-label ETF and ETC platform and leading provider of digital asset ETPs asked leading experts on decarbonisation electric vehicle (EV) charging and the digital revolution about their takeaways from the year so far and their outlook for the rest of 2023.

Gabriela Herculano manager of iClima Global Decarbonisation Enablers UCITS ETF (CLMA) comments: “Investors hoping for a smooth ride in 2023 have been so far disappointed. After a hopeful start in January with positive signs on interest rates and inflation from the US Fed better-than expected gas prices and seemingly muted effects of the war in Ukraine investors were dealt another blow in March with the collapse of Silicon Valley Bank. Rising interest rates remain a worry with the Fed Chair recently stating to Congress that “the ultimate level of interest rates is likely to be higher than previously anticipated” with consensus estimates targeting close to 6%.

“Increased interest rates and uncertainty on further rises has hurt growth stocks including those in the climate sector while the spike in gas prices has benefitted fossil fuel companies in the short term. However there is no doubt that the green energy transition has accelerated 2022 was the first year in which investment into clean energy matched that of fossil fuels. The IEA projects the EU’s renewable energy growth to be 30% higher than it had forecast last year. It now forecasts that renewable energy will become the largest source of generation by 2025. Combined with the boost from legislation in the US and Europe we expect the climate sector to be a winner in the medium to long term.

“It is plausible that investors will decouple green growth from growth in general. How early we will see a real green rally will depend on what will prevail – fear of missing out or fear of getting burned.”

Konrad Sippel Head of Research at Solactive the index providers for the Electric Vehicle Charging Infrastructure UCITS ETF (ELEC) comments: “The first few months of 2023 have been intense months for the world of electric vehicles (EVs) and EV Charging Infrastructure. In addition to leading companies like ChargePoint or EVgo posting record results for their respective fourth quarter results there has been a steady flow of encouraging news for the sector.

“The EU has finally reached agreement with all member states (including Germany) on the final scope of the sales ban for internal combustion engine as of 2035. The backdoor for combustion engines running on highly inefficient CO2-neutral fuels or E-Fuels is likely to prove to be a tiny footnote on a legislation that now confirms that the energy transition towards battery electric vehicles will accelerate substantially.

“Further boosting the sector is the deal on alternative fuels infrastructure as part of the EUs fit for 55 program which will ensure the expansion of electric charging infrastructure to a density of one every 60km across the main motorways of the continent.

“The ecosystem is beginning to change as well. The news of TotalEnergies selling all of its petrol stations in Germany and the Netherlands to a buyer from the shopping and entertainment sector gives a glimpse of the transition that lies ahead as petrol stations are phasing out to make room for EV charging stations.”

Anthony Ginsberg manager of the HAN-GINS Tech Megatrend Equal Weight UCITS ETF (ITEK) and HAN-GINS Cloud Technology Equal Weight UCITS ETF (SKYY) comments: “In the first quarter of 2023 we saw a strong Tech bounce-back partly due to lower US Inflation. ITEK is up almost 17% for 2023 and SKYY almost 12% YTD.

“ITEK has a 14% exposure to China -and the digital revolution theme has benefited from China’s reopening. The recent Alibaba restructure into 6 separate companies has also boosted its valuation. At the same time the rise of US and EU trade disagreements with China is pushing more onshoring -boosting robotics and factory automation in the West.

“Furthermore cloud tech integration of AI apps such as ChatGPT and BARD is boosting corporate usage. The growing need to have fast-paced remote speeds and sufficient memory to use AI is pushing more companies to use cloud services -especially due to the lower costs which are much welcome in a recessionary environment. Given that the trend of working-from-home seems here to stay the cloud will only become more vital. This is further evidenced by US Federal and state government cloud and cybersecurity spending including the recently awarded $9 billion contract to the Pentagon.

“In terms of entertainment smartphones are fast approaching a 50% share of all gaming usage. Traditional TV media is losing record numbers of subscribers in favour of Digital Streaming players (Netflix Hulu Amazon Prime etc).”

ELEC ITEK and SKYY are all certified under the Sustainable Finance Disclosure Regulation (SFDR) as Article 8 owing to their objectives to have a positive impact on the environment and society.[1] CLMA is Article 9 as it actively works to reduce carbon emissions. [2]

These certifications are particularly significant in the context of a string of Article 8 and 9 declassifications that occurred in anticipation of level 2 SFDR’s arrival in January of this year. Many funds felt obliged to downgrade their status to Article 8 towards the end of 2022 fearing legal liability. HANetf is proud that over 70% of its funds have maintained Article 8 status with CLMA remaining Article 9 -the highest achievable level.

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