Europas 1. nachhaltiger Lebenmittel-ETF 🌱 Sustainable Future of Food von Rize [Analyse] - YouTube

In order to save our planet, we need a fundamental change in our food

and nutrition system. The Sustainable Future of Food ETF aims to

map the companies that should be part of this revolution. How Rize

defines sustainability and for whom this ETF is worthwhile - we will clarify today.

Hey, my name is xHeaven and today we are looking at the Sustainable Future of Food ETF from Rize

which - unlike other food ETFs & funds - specifically maps companies that are really

sustainable and not only work on their ESG scores in order to be sustainable works.

Let's start with the fund company: Rize has only been on the market since 2019 and is Europe's first

issuer specializing exclusively in themed ETFs. Rize is currently offering 5 Megatrends

ETFs and is working on a sixth, which I am very excited about personally. I have already presented

the latest sustainable world ETF. You can find the link to the video

in the video description. First of all, let's ask ourselves a question: 'Why is the subject of food so

exciting and what are the current problems of our food system?' Energy and food production are

among the largest sources of greenhouse gas emissions.

It is often argued that we are fighting climate change

by foregoing fossil fuels and relying on renewable energies - which

sounds logical. The problem is, even if we stopped all

fossil fuel emissions immediately, emissions from

global food production alone would cause us to miss the 1.5 ° C target.

If that's not terrifying enough, I'll give you a few more terrifying numbers

to show just how broken our food system is. Poore & Nemecek found in 2018 that the

food industry is responsible for 26% of all global man-made greenhouse gas emissions

and almost half of those emissions come from the meat sector.

Half of the world's habitable land is used for agriculture

and 77% of this agricultural land is used either as pasture land or for

growing feed for livestock. That is, we grow food

that other living things eat so that we can in turn eat those living things.

But it gets worse: cattle and soy production is the main cause of

deforestation in the Amazon today . Almost 80% of soy production is used to feed

farm animals, including cattle. The beef and lamb / mutton supply chains

emit more CO2 equivalents per kilogram than any other type of food.

So there is a lot to be done if we are to save our planet and make it habitable

for future generations. Now we come to the investment focus of the ETF. The good news

after all these terrible things: There are some ways to make our

food production system more sustainable and thereby reduce emissions.

Rize mentions the following possibilities: a change to a plant-based diet;

a healthy calorie consumption; less food waste

and improved crop yields and farming practices.

The Rize Sustainable Future of Food depicts companies that are driving this transition to a

sustainable food system. In contrast to other food funds,

companies that earn money with meat and animal products

are specifically excluded, commercial fishing and fish farming are avoided and strict

attention is paid to the use of palm oil and soybeans. Now we come to the definition of 'sustainability'

and as we all know it is very difficult to define 'sustainability'. I have

already discussed several times in videos in which I have

presented the best sustainable MSCI World ETF. It is simply very difficult because everyone understands something different by 'sustainability'

and especially when it comes to strict acceptance criteria and an ETF has the word

'sustainable' in its name, special methods have to be used to incorporate this type of

sustainability into to make it measurable in some way. Rize is very transparent about this.

I can immediately show how the individual companies are explicitly selected

and which conditions must be met in order to be included in the ETF.

Before that, I summarize a mail from Rize in which it was explained in detail what Rize

understands by 'sustainability' and how they differ from other food ETFs:

What is 'sustainable' and, more precisely, what does it mean to be sustainable

in the food industry be? Sustainability in the food system can be measured in terms of a

number of factors, including emissions and environmental factors such as biodiversity

and pollution. Another equally important factor is access to healthy and

nutritious food. The approach of the Rize Sustainable Future of Food ETF is to invest in

those areas of the food system (i.e. each thematic sector) that

contribute to and benefit from the transition to a sustainable future of food.

Together with strategic partner Tematica Research, Rize has identified

the globally listed companies that derive all or a large part of their income from plant-based

foods. Since conventional meat consumption, especially beef, is incompatible

with a sustainable future of nutrition, they exclude companies that

produce food from land meat from this issue. For this purpose, the ETF has been classified as an

Article 9 financial product. It must be measurably disclosed

how the index differs from a broad market index and how the measurable sustainability

goal is to be achieved through the investment. This is called impact investing, which is much

stricter than ESG Article 8 financial products (i.e. everything that is thrown on the market

and sold as sustainable). Now we come to the differences to other food ETFs

and funds and these are huge. There are currently 8 food ETFs available in Germany,

there are many more funds, but we only focus on ETFs. These 8 food ETFs can

hardly be compared with the Rize ETF and sometimes follow a completely different approach.

It is enough to take a look at the currently largest food ETF, the iShares STOXX Europe 600 Food & Beverage

ETF, to see that sustainability is out of place here, but at least it is

not in the name. The largest position in this ETF with over 30% is Nestlé - I don't think

I have to say anything about that. What does Rize say about it? - Quote: "Almost every other food

fund owns stocks like Nestlé, Leroy Seafood, Nomad Foods, Salmar and US Foods, which in our opinion are

not sustainable food companies. Some supposedly sustainable food

funds even hold large fast food chains like McDonalds and Burger King. Not all food funds

have sustainability as a stated goal, but if they don't then

why not? Some certainly have ESG screening, but is that really enough to

meet a food system sustainability goal?" - Personally,

I don't think so, and neither does Rize, and that's why they take a much stricter approach and

I will now briefly tell you something about Nestlé. Because Rize spoke specifically about the company

and it's very exciting to relate the whole thing to the ETF itself.

Speaking specifically about Nestlé, Rize says that while Nestlé has also brought sustainable products to the market,

such as the milk alternative Wunda made from pea,

an internal presentation by the company recently described more than 60% of its food and beverage products

as unhealthy. Foods like chocolate, coffee and meat products are among the foods that contribute

most to global human-made greenhouse gas emissions and

deforestation - and as a result, such companies are deliberately excluded.

It is not enough to have a few sustainable products while the rest of the

business does not meet the requirements. This example in particular shows

how strict the admission criteria are - I personally really like that.

Now let's look at how strict the selection process really is: Step number 1:

Tematica Research creates the universe of stocks in accordance with their Sustainable Future of Food

classification and thematic (revenue-based) purity ratings. These include:

Entirely plant-based commitment; Avoiding meat and animal products (eggs,

dairy products); Abandonment of commercial fishing and fish farming; no companies

producing genetically modified seeds; only packaging companies that produce

reusable, recyclable and compostable packaging. In the next

step, the equity universe is screened

for thematic (revenue-based) purity and companies with a thematic purity of <2 are excluded.

The next step is a minimum market capitalization and

liquidity (this is standard in many ETFs). This includes companies

with a free float market capitalization of <USD 100 million and companies with a

3-month average daily trading value of less than USD 1 million - this simply

filters very small companies that do not have enough liquidity and in certain cases phases cannot

simply be sold quickly. Other companies are excluded companies are

excluded if they have poor (or non-transparent) management of the

most important forest risk goods within their supply chains. Mainly related to:

palm oil, soybeans, cattle and timber. Now the companies are weighted based on their

thematic purity (depending on turnover). The index is ready.

The index is rebalanced every six months in March and September. Now let's briefly come

back to the combination with the Environmental Impact 100 ETF. The Sustainable Future of

Food ETF does not contain any companies that are listed in the Environmental Impact 100 ETF. You

can see both as a unit, so both ETFs complement each other and rule out a cluster risk.

(As I said, my video is in the description. You can find out more about this ETF,

which is also very interesting). It's a physically

fully replicating ETF that is accumulating (sustainable ETFs that are synthetic can

be forgotten anyway, but that's another topic). We even come to a fund size of

259 million. The ETF has a TER of 0.45%, which is perfectly fine for themed ETFs.

45 companies are currently included in the ETF, the share of the top 10 is 33.52% and,

unlike in many other ETFs, more than 40% of the companies in this are small caps - currently

it is even over 46%. America is of course also the highest weighted in this ETF, but

there are also a large number of companies from all over the world. The

sectors are also broadly positioned here: Not only food companies are represented,

but every sector that makes a contribution to a sustainable food system. These include:

plant-based and organic foods, sustainable packaging, food safety

and testing, precision farming, agricultural science, water

technology, supply chain technology and ingredients, flavors and aromas (including

a company such as Symrise). Now let's move on to the largest positions and, more generally,

the stocks that make up the ETF. Anyone who has not dealt intensively with the subject of nutrition,

packaging will not know most of the ETF companies

either. Which is of course good, because with this ETF we are not re-mapping

the classic companies in our portfolios and are diversifying further. Now we come to a topic that

I'm personally not very interested in about this ETF, but

which probably interests most people - that is the topic of "performance". We have to

keep in mind that the fund was only launched on August 27, 2020 (it has been on the market

for almost a year). If we look at the performance compared to the iShares Core MSCI World,

then the Food ETF is clearly behind. In the meantime, the two ETFs have briefly

overlapped, but the performance of the Rize Sustainable Future of

Food is now well behind that of the MSCI World. Compared to the ACWI IMI,

the performance of the Sustainable Future of Food is not ahead of that of the classic basic investment,

but now we come to my conclusion: This is not about pure performance. If you want to invest in this

particular topic just to be able to achieve high returns quickly, you are in the wrong place here.

Some of the companies shown are high priced, most of them are making

losses are currently still outsiders who can set new standards in the future.

Our current food system is an absolute disaster and it is up to each

of us to do something about it. As consumers, we ultimately decide

what will sell well and put on the shelves. If we stop supporting certain brands,

try to eat a little less meat and deliberately avoid cheap meat - this can

be a step in the right direction. If you want to invest

specifically in sustainable companies that set new standards for our ailing food system, this

is the right place for you. The ETF has the potential to achieve enormous growth in value over

the next few years, but it can also perform worse than average for a few years.

That depends on politics and also on our diet. That should have been

it with this video. I hope you learned something. As

I said, it is a very special topic and anyone who wants to invest very sustainably

does not primarily pay attention to performance. In impact investing, the benefit comes

before the return. One final note: I'll be making more sustainable videos in the future.

I'm already planning a video in which I will present five really sustainable

ETFs and at the end of the year I will also present which ETFs I am currently

saving. There is still a lot to see and I hope we will see or hear each other again in this

video. I hope you are fine and see you again soon until the next time.