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New ‘Green’ Technology Shipping ETF Gives Investors Access to Maritime’s Decarbonization Transition

Mike Schuler
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September 21, 2021

The founder of the stock market’s only freight futures exchange-traded fund (ETF) focused exclusively on the dry bulk shipping sector has launched the world’s first “green” technology shipping ETF.

ETF Managers Group’s ETFMG Breakwave Sea Decarbonization Tech ETF (NYSE Arca: BSEA) started trading today on the New York Stock Exchange. BSEA is designed to give investors access to a diversified set of global companies involved in actively reducing the environmental impact of the global maritime sector, including those that develop technologies, manufacture equipment or provide services related to marine or ocean decarbonization.

“BSEA is a key step towards capitalizing on the ocean decarbonization transition by providing investors with an easy way to track the performance of publicly-traded sector leaders backed by comprehensive research and analytics,” said John Kartsonas, Founder and Managing Partner of Breakwave Advisors, which will manage the ETF on behalf of provider ETFMG.

With some 90% of global trade moving by sea, it is estimated that shipping accounts for roughly 3% of global carbon emissions. As the regulatory body for the industry, the UN International Maritime Organization has set a goal of reducing CO2 emissions from ships by at least 40% by 2030 and 70% by 2050, compared to 2008 levels, that will put the industry on “a pathway of CO2 emissions reduction consistent with the Paris Agreement temperature goals”. As of earlier this year, estimates for the total cost of modernizing the global commercial fleet to reach 2050 emissions targets was said to be $1.9 trillion.

BSEA will provide exposure to companies involved in developing and commercializing decarbonizing technologies. This includes companies involved in cleaner propulsion (including alternative fuels, batteries and fuel cells), carbon capture technologies and offshore wind development, since ships are an integral part of building offshore wind farms.

ETFMG was responsible for bringing to market the Breakwave Dry Bulk Shipping ETF “BDRY” in 2018, which remains the only freight futures ETF focused exclusively on the dry bulk shipping sector. Through the six months of 2021, BDRY produced an astonishing 281.2% return ranking it as the highest-returning fund in the first half of the year, according to ETF.com.

“We are excited to bring yet another first to the market with BSEA, a product that answers investor demand for access to these disruptive technology companies at the forefront of ocean decarbonization,” said Sam Masucci, Founder and CEO of ETFMG.

BSEA will track the Marine Money Decarbonization Index (MMDI), which was developed and maintained by Maritime Transformation Partners, a collaboration between Marine Money, Breakwave Advisors and Sea/Switch Partners.

“Shipping will always remain a major part of the global economy, while the decarbonization transition will provide considerable investment opportunities that are still in their infancy,” said Hal Malone, Principal of Sea/Switch Partners.

“For more than 30 years, Marine Money’s mission has been to facilitate and strengthen the relationship between investors and the maritime industry. As the industry embarks on a multi-decade process of mandated decarbonization, the Marine Money Decarbonization Index will help investors participate in this significant opportunity,” added Matt McCleery, President of Marine Money. “The launching of the Index marks the beginning of an important journey. We anticipate that the Index will evolve as more companies go public and existing companies grow and satisfy the Index inclusion requirements.”

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