Thematic investing has continued to rise as Aussies target specific trends.
According to Betashares, one of the three overarching megatrends that's shaping the future is climate change.
Thematic investing is when an investor tries to identify long-term transformational trends. Investors can benefit if those trends play out.
According to Betashares, as a megatrend, climate change encapsulates:
- The impacts and resource scarcity caused by climate change and environmental degradation
- Policy initiatives designed to support decarbonisation and the climate transition
- Consumer and investor preferences for sustainability.
One way to target this megatrend is through ASX ETFs.
There are several that aim to capture this theme, some of which have dropped to start 2026.
This could make it an ideal time to initiate an investment in this theme.
Here are some climate positive ASX ETFs to consider.
Betashares Climate Change Innovation ETF (ASX: ERTH)
ERTH ETF aims to track the performance of an index that comprises a portfolio of up to 100 leading global companies. These companies derive at least 50% of their revenues from products and services that help to address climate change and other environmental problems through the reduction or avoidance of CO2 emissions.
This included clean energy providers and other leading companies tackling:
- Green transport
- Waste management
- Sustainable product development
- Improved energy efficiency and storage.
It has performed extremely well over the last 12 months relative to some other climate positive funds.
It is up 10.48% in that span.
BetaShares Global Sustainability Leaders ETF (ASX: ETHI)
This fund aims to track the performance of an index (before fees and expenses) that includes a portfolio of large global stocks identified as "climate leaders."
These companies have also passed screens to exclude companies with direct or significant exposure to fossil fuels or engaged in activities deemed inconsistent with responsible investment considerations.
At the time of writing it is made up of just over 200 international companies. Its largest exposure (73%) is to the United States.
It has fallen 8% in 2026.
SPDR S&P World Ex Australia Carbon Control Fund (ASX: WXOZ)
This ASX ETF combines roughly 1,000 companies outside Australia.
It is designed to measure the performance of S&P Global ESG Score-screened companies within the S&P Developed ex Australia LargeMidCap Index and weighted to minimise carbon intensity in the portfolio.
Essentially, the index is designed to support investors seeking to reduce their exposure to carbon intensity measured by weighted average carbon intensity.
It has fallen 5.4% year to date.
iShares Core MSCI World All Cap ETF (ASX: IWLD)
IWLD ETF aims to provide investors with the performance of the MSCI World Ex Australia Custom ESG Leaders Index, before fees and expenses.
The index is designed to measure the performance of global, developed market large and mid-capitalisation companies with better sustainability credentials relative to their sector peers.
At the time of writing it is made up of 655 holdings. The fund has fallen 5.3% for the year to date.
The post Is now the time to buy climate focused ASX ETFs? appeared first on The Motley Fool Australia.
Motley Fool contributor Aaron Bell has positions in BetaShares Global Sustainability Leaders ETF. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
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