Luke Oliver, Head of Strategy for KraneShares, joined Julie Cooling, Founder and CEO of RIA Channel, to discuss three macro trends shaping risk and return over the next ten years.
The first trend is the growth of alternative investments, as investors are especially interested in investments that provide a low correlation to equity markets and an ability to hedge inflation.
The second trend is China, which is still the fastest-growing global economy. Investors may be especially attracted to Chinese growth stocks, with a focus on the tech sector.
The third trend is the investment opportunities the climate sector presents, including carbon markets, lithium and cobalt, and energy transition technologies. Traditional energy companies are some of the leading investors in new energy processes and technologies. Rather than viewing climate investing as an ESG imperative, investors may benefit from the economic opportunities presented by a high-growth sector with significant capital needs.
The KraneShares Global Carbon Strategy ETF (KRBN) focuses on a diversified portfolio of compliance carbon markets, while ETFs are available for California-specific (KCCA) and European-specific (KEUA) permit markets. Investors can add carbon allocations to their portfolio without divesting from equities or equity sectors. An allocation of 4% to 8% to carbon markets can more than offset the carbon emissions of companies held in an equity portfolio. The KraneShares Electrification Metals Strategy ETF (KMET) includes exposure to metals including copper, lithium, cobalt, nickel, zinc, and aluminum.
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