China’s Green Enablers Deserve a Place in Equity Funds
Most environmental funds have little or no holdings in China. Five of the 10 largest global environmental equity funds by assets under management had no exposure to China at all at the end of 2022, according to our research based on Morningstar data. Four of the remaining five had less than 5% of their holdings in China.
All Environmental Roads Lead to Chinese Companies
That seems like a missed opportunity. Accelerating decarbonization efforts around the world require Chinese products. Demand for solar energy, wind power and electric vehicles (EVs) draw on vast global supply chains. And Chinese companies dominate some global markets for raw materials, products and components that enable the green transition.
For example, Chinese copper and nickel are essential ingredients for wind turbines, solar panels and EVs. China also processes 58% of the world’s lithium and 87% of rare earths, which are used to manufacture wind turbines and EVs (Display).
Energy Transition: Here Comes the Sun and Wind