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China Fund Chiefs Turn To Wind Power As Green Demands Grow

As global climate talks in Glasgow rekindled interest in China’s carbon neutrality pledge, its fund managers have been rushing to launch wind power funds


Wind power funds in demand in China
China confirmed to the UN last week it would cut its emissions to "net zero" by 2060. Photo: Reuters

 

Chinese fund managers are lining up to set up wind power funds in response to investor demand for greener portfolios. 

More than 10 fund managers have applied to set up China’s first batch of exchange-traded funds (ETF) tracking the wind power industry since last Friday, according to the country’s securities regulator.

China confirmed to the United Nations last week that it would bring its emissions to a peak before 2030 and cut them to “net zero” by 2060 – a pledge President Xi Jinping first made in 2020. 

China also promised to raise total wind and solar power generation capacity to 1,200 gigawatts by 2030 in order to reach its goals. 

 

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The mutual fund houses which have submitted applications include China Asset Management, GF Fund Management, Harvest Fund, the China Securities Regulatory Commission’s (CSRC) website showed.

If permitted, the funds will bring more money into an already red-hot sector. The new energy index has almost doubled in one year as China steps up efforts to become more green.

There are already many ETF products tracking sub-sectors in the new energy industry, such as new energy vehicles and the photovoltaic industry, but the wind power industry ETFs would be the first ones tracking this sub-sector.

The ETFs will be based on the CSI Wind Power Industry Index, which tracks companies from upstream suppliers to downstream constructors and operators. 

That index has surged around 80% since it was launched in April this year, fuelling fears of a bubble. Analysts also said the competition will be fierce if too many homogeneous funds are set up at the same time.

 

  • Reuters with additional editing by Sean O’Meara

Read more:

‘Common Prosperity’ Sees China Stock Investors Going Green

China To Scrap Green Car Credit Scheme As Beijing Ups Net Zero Drive

 

Sean OMeara

Sean O'Meara is an Editor at Asia Financial. He has been a newspaper man for more than 30 years, working at local, regional and national titles in the UK as a writer, sub-editor, page designer and print editor. A football, cricket and rugby fan, he has a particular interest in sports finance.

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