The International Energy Agency (IEA) predicts a significant shift in the global power mix, with renewable energy projected to overtake coal as the leading source of global electricity generation by 2025.
By 2028, renewables will account for over 42% of the world’s electricity, marking a transition to cleaner energy.
In China, there has been a transformation with renewable power generation capacity exceeding that of coal-fired electricity in the first half of 2024, capturing 38% of the market share.
This transformation in the new energy sector has opened more investment opportunities, especially in clean and renewable energy and the low-carbon transition of industries like thermal power plants and steel manufacturing.
Also read: China leads global renewable energy surge with two-thirds of major wind and solar plants
E Fund, China’s mutual fund manager, serves both domestic and international investors offering a range of ETFs, including the CSI New Energy ETF, E Fund Carbon Neutral 100 ETF, and E Fund CNI New Energy Battery ETF.
The CSI New Energy Index, which the CSI New Energy ETF tracks, is heavily focused on the clean and renewable energy sector. Over 70% of its constituents are involved in the electrical equipment sector.
In contrast, the SEEE Carbon Neutral Index, tracked by the E Fund Carbon Neutral 100 ETF, offers a broader exposure, with 67.2% of its composition in clean energy and 32.8% in companies engaged in the low-carbon transition.
Also read: China nails down a three-year plan to upgrade power system and ramp up renewables
Additionally, China is undergoing a comprehensive green transformation across its economy.
The electric vehicle (EV) industry is a prime example of this shift, as new energy passenger car sales surpassed those of conventional vehicles in July, with the monthly penetration rate of new energy vehicles (NEVs) surpassing 50% for the first time.
To capitalize on this trend, the CNI New Energy Battery Index, tracked by the E Fund CNI New Energy Battery ETF, focuses on the growing energy storage system (ESS) battery manufacturing and integration sector and is expected to benefit from the sector’s anticipated growth, with an estimated net profit growth rate of 22.6% in 2024.