Oil tycoon T. Boone Pickens’ self-titled fund is exchanging out one of its crude funding vehicles for renewables, seeing an opportunity in clean energy as fossil fuels get pounded within the capital markets.
BP Capital Fund Advisors LLC plans to revamp an oil-focused exchange-traded fund with a shift to renewables in mid-August, based on a Friday filing. The underlying index was co-developed by BP Capital’s investment adviser and Morningstar Inc. and is made up of North American corporations which are “leaders within the transition to a low-carbon economy,” following a regulatory filing.
BP Capital, a derivative of Pickens’ shuttered hedge fund, launched the oil ETF merely last year, offering investors exposure to companies that benefited from an increase in world crude prices. Brent oil futures are down about 15% within the previous year, whereas BP Capital’s ETF, which trades under the ticker BOON, is down nearly 20%.
Meanwhile, each the WilderHill Clean Energy Index is up 19% in the past 12 months, and a Bloomberg Intelligence index of large solar companies is up 1.7%.
The revamped ETF, which can trade as RENW, relies on an index of corporations that derive “significant revenue” from renewables or meet a big portion of their energy wants from renewable sources. BP Capital isn’t giving up on petroleum — the agency will proceed to offer a pipeline ETF, for example.
Energy’s position in the S&P 500 Index has plunged to just over 5% now from almost 11% as recently as 2014.