ENERGY FINANCE


ENERGY AS ETF


ETF stands for Exchange Traded Fund. ETFs are specific and dynamic (based on market or time or data rules) mixes/combinations of on exchange listed shares, that together give more designed security or return. ETFs can be compared by ordering a by the chef de cuisine configured top menu of the day in the restaurant of a famous chef. Restaurants operates in a certain type of cuisine, ETFs also. ETFs are market knowledge put in to daily configured investment products as an investment concept. ETFs are for investors that search specific active (based on rules) share mixes that are handled by a computer. ETFs are part of the transparency development in capital, where the capital issuer wants more control on their investment but doesn't want that this give them extra work. ETFs in the early days (just a few years ago) were static index trackers. Today ETFs are actions based on a vision on the market mechanisms. ETFs offers the possibility to create huge market demand for listed energy project shares, based on different strategies (action = reaction rules, time period rules, result data rules). The difference between a Traditional Fund and ETFs is that by ETFs the capital issuer determines the investment policy (by choosing for an ETF). For energy investments ETFs thereby are complementary supporting on IPO as energy finance instrument. ETFs are a good instrument to fund unknown but good projects in energy. The ETF is young tool, so both the technology, the scope of supply and the use is still changing a lot. The life time of the traditional funds is gone. The so called professionals have realized less profits. The capital world is changing. Investors will decide more themselves. Investors will only go in industries and models they understand. Capital will stay closer to home. The EFT is just a tool in these processes. The traditional funds will disappear and become just an overall brand for an ETF factory or ETF super market. For more detailed information on the origin and current status of ETFs see http://en.wikipedia.org/wiki/Exchange_traded_fund or google for it. From capital demand perspectives ETFs can be used to create demand for shares of good performing, but less well know listed energy material manufacturers, specific energy projects and/or energy project developers. Energy as ETF is a concept capable of generating a massive energy transition investment wave.


Author: Gijs Graafland


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