Now You Can Invest in a Plant-Based Climate-Friendly Fund, Via This New ETF
The time to invest in the future is now. At least that's what the founders of a new fund for plant-based and sustainable companies are betting on. A company called VegTech Invest just announced that it will be offering its first global ETF (which stands for exchange-traded fund) of publically-traded plant-based companies entitled VegTech Plant-Based Innovation & Climate ETF with the ticker EATV.
The ETF will launch on the New York Stock Exchange as a way of letting investors put their dollars into plant-based companies that are innovating new food alternatives and sustainable products to help slow and reverse the rate of climate change. The ETF includes 37 publicly traded companies that sell products made with plant foods or plant-derived ingredients.
You eat plant-based but should you invest in an ETF
For years, the plant-based stock market has been steadily growing as companies like Beyond Meat IPO'd and skyrocketed to a high of $234 per share. But even as those early days were exciting and full of promise, supply chain, and competition have brought Beyond back down to earth, now trading at about $67. The same is true, on a shorter timetable, for media darling Oatly, the non-dairy milk and ice cream company that bowed at $28 and now can be bought at just $8.
But investors in VegTech and true believers in the power of plant-based foods to lower our carbon footprint and boost sustainability long term see these dips as opportunities. They are playing the long game, and if you are eager to place bets on this sector, EATV is a way to do it and diversity at the same time. Unlike investing in a single stock (which like Beyond can see major challenges from new entries into the meat alternative section of the supermarket every month) you're investing in the entire plant-based sector with an ETF.
It's not the first vegan-centric ETF on the exchange. On September 10th, 2019, Beyond Investing launched the world’s first vegan-centered Exchange Traded Fund (ETF) on the New York Stock Exchange, with the ticker VEGN. Comprised of stocks that are vegan-friendly, the fund was designed with the health and safety of people, animals, and the planet in mind.
So the question is: Would it have been a good investment, and should investors consider it a “buy” now, over two years later? In a story by Sarah Kings on the first anniversary of the VEGN ETF, The Beet wrote:
"One year later, the Index has consistently outperformed the S&P 500. On its birthday earlier this month, VEGN had a 27.69 percent total return on market price. By comparison on the S&P from last August to this August went up 19.6 percent, and in another sector, Callon Petroleum Co.(CPE), widely considered one of the biggest names in oil and natural gas, fell -86.83 percent, and Tyson (TSN) the meat company is down -30.27 percent."
VEGN launched in 2019 at a price of $25. Now it's trading at $41. In the same two-plus years, S&P has nearly doubled so if you had invested $1,000 in VEGN that would now be worth about $1,640. But the S&P would have beat it since that same $1,000 would now be worth close to $1,970. Still, many people are happy to invest their dollars in alignment with their values, and VegTech is betting on the continued consumer enthusiasm for plant-based products and a passion for sustainability.
VegTech is founded by two plant-based pros
Founded by Elysabeth Alfano (who is a regular contributor to The Beet) and Sasha Goodman, VegTech intends to invest in companies that are working to change the future of food and the impact it has on the planet. The ETF's portfolio features brands and companies that positively impact climate change while simultaneously addressing global issues such as food insecurity, animal cruelty, public health policy, and deforestation which leads to the destruction of biodiversity and global warming.
VegTech’s primary goal is to research and invest in companies as a way of providing investors the chance to financially back enterprises that have a positive impact on the planet. Its inaugural fund will allow investors to own and support sustainable, plant-based, and health-conscious companies and democratize investing in positive-impact companies.
“We are excited to be what we believe is the first pure-play ETF that invests in companies innovating with plants and producing animal-free products. We believe that today’s investors want a more resource-efficient, climate-friendly, and cruelty-free food and materials supply system…and want to invest their dollars in the same,” Alfano said. “My partner Sasha Goodman and I are excited to offer an ETF that empowers the average person to invest with their values and participate in this large-scale, secular trend.”
Alfano and Goodman set out to launch EATV in response to consumer demand for plant-based products, especially among millennials and Gen-Z. While high-profile plant-based stocks like Beyond and Oatly appear to be struggling, the industry as a whole is growing at a rate that outpaces other parts of the food sector. The global plant-based market is expected to surpass $162 billion within the next decade, growing 451 percent by 2030.
Young consumers are leaning plant-based
The VegTech fund reflects sustainability trends that have become popular as climate events have overtaken the news cycle, whether they be fires, floods, or the pandemic, and younger consumers are more concerned than ever that the time for change is now. A study from First Insight called The State of Consumer Spending noted that 68 percent of millennials are willing to pay more for sustainable products and another survey found that 54 percent of millennials define themselves as flexitarians, choosing to forgo dairy and meat more often than ever.
VegTech founder Goodman explained that she and Alfano are hoping their fund encourages more companies to sit up and take notice of this consumer shift. “With this ETF, I am excited to drive capital to plant-based innovation companies," Goodman said. "I also hope to encourage public companies to lead the way and replace animal products with innovations that are better for people, the planet, and the animals."
A report from Aramark found that 65 percent of Gen Z consumers want a more plant-forward diet. It also uncovered that 79 percent of consumers are interested in shifting their diets to eat meatless at least once or twice a week. The study indicates a strong interest in sustainability among the younger generation. VegTech is hoping to use this as an awareness opportunity.
“I look forward to doing a lot of public speaking about the connection between our traditional agriculture system and climate change,” Alfano said to Green Queen. “Many still don’t know about the environmental benefits of plant-based innovation. So, getting out that message will be critical, as well as building our assets under management. We are proud to be the first pure-play fund in plant-based innovation, focused on the companies innovating with plant-based ingredients and creating animal-free foods and materials.”
Prior to the ETF launch, VegTech compiled an index tracker described as the “vegan Dow Jones.” The investment management firm aimed to spotlight companies positively impacting planetary health, human health, and animal health within the stock exchange. The index consisted of 21 companies that all upheld the basic principles that VegTech is founded on.
Considering the climate crisis and COVID-19 pandemic, the enthusiasm for plant-based diets is continuing to grow. A report from Meticulous Research says that this trend is expected to continue. The alternative protein industry is expected to grow at an 11 percent CAGR between now and 2027. If current market trends are any indication, VegTech's ETF is allowing consumers to buy now while the prices are relatively low.