eToro launches investment portfolio focused on extreme weather events

Rick Steves

“The reality of climate change has created a growing demand for resilience and for recovery solutions. Extreme weather events push policymakers to invest or regulate to address climate change.”

eToro has launched the XtremeWeather portfolio, a new offering that aims to give retail investors exposure to companies equipped to address challenges arising from increased extreme weather events.

The launch comes in the wake of NASA’s report declaring the previous summer as Earth’s hottest on record. This has highlighted the growing impact of extreme weather, including hurricanes, wildfires, droughts, floods, and heatwaves.

XtremeWeather portfolio consists of 30 stocks

The XtremeWeather portfolio consists of 30 stocks from industries like renewable electricity, industrial machinery, fertilizers, home improvement retail, electrical equipment, and gas. These sectors play a key role in recovery and normalization after extreme weather events. The selection process involved evaluating thousands of stocks, with criteria including market capitalization, ESG score, liquidity, analyst rankings, and sales growth.

Dani Brinker, Head of Investment Portfolios at eToro, remarked on the significance of 2023 as a year marked by climate change. He cited various global weather-related disasters, emphasizing the increasing demand for resilience and recovery solutions.

“2023 will be remembered as the year of climate change. From the effects of El Niño in Australia to the floods in Italy and the wildfires in Maui, almost no continent has been immune. The reality of climate change has created a growing demand for resilience and for recovery solutions. Extreme weather events push policymakers to invest or regulate to address climate change. With the global climate conference, COP28, around the corner, we wanted to offer retail investors the opportunity to invest in the climate-proof their portfolios and diversify into industries that will help rebuild our cities, communities, and surroundings wildlife after these extreme climate events”, said Brinker.

Equal weight across all stocks to manage the unpredictability of weather and policies

The portfolio will undergo annual rebalancing, or as needed, to stay relevant and optimize performance. To manage the unpredictability of weather and policy changes, it spreads equal weight across all stocks, minimizing concentration risk and enhancing resilience.

Starting at a minimum investment of USD$500, the portfolio offers tools and charts for performance tracking. eToro’s social feed will provide sector updates. Currently, this portfolio is not available to U.S. users.

eToro launched crypto Smart Portfolio

eToro partnered with Index Coop, a Decentralized Autonomous Organization (DAO), to launch a new crypto Smart Portfolio. Backed by Sequoia Capital, Index Coop is renowned for its expertise in on-chain structured products. The partnership aims to offer retail and institutional investors alike an opportunity to gain exposure to some of the most exciting sectors in the crypto universe—Bitcoin, Ethereum, DeFi, and the Metaverse.

The new crypto Smart Portfolio is meticulously designed to capture market trends in four key sectors. It allocates 30% each to Bitcoin and Ethereum, the juggernauts of the crypto world, with the remaining 40% being split between DeFi Pulse Index (30%) and Metaverse Index (10%). The DeFi Pulse Index tracks a myriad of applications like decentralized exchanges, money markets, and synthetic assets, featuring tokens such as Uniswap, Aave, and Synthetix. The Metaverse Index, on the other hand, aims to capture the virtual economies through tokens from leading projects like Sandbox and Decentraland.

One of the standout features of this Smart Portfolio is its commitment to adapt to market dynamics through quarterly rebalancing. Leveraging Index Coop’s analytics and insights, the asset allocation within the portfolio will be adjusted based on market capitalization, maintaining a maximum allocation of 30% to any asset to ensure diversification.

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