Clean Energy Transition

The Clean Energy Transition basket targets companies enabling the shift to low-carbon power systems through energy storage, green hydrogen production, and critical battery materials supply. It holds 20 names diversified across industrials, materials, and specialized clean technology sectors, with an effective N of 18.8 indicating limited concentration risk beyond the top holdings. The investment logic rests on accelerating global deployment of renewables and electrification, where BloombergNEF data shows energy transition investment reached a record $2.3 trillion in 2025, up 8% year-over-year, driven by $893 billion in electrified transport, $690 billion in renewables, and $483 billion in grid infrastructure; long-duration storage and green hydrogen address intermittency and hard-to-abate sectors, while sustainable lithium secures the EV and stationary storage supply chain amid rising electricity demand from data centers and industry.

Key risks include one pair of holdings exhibiting correlation above 0.8, which can amplify drawdowns during sector-wide shocks such as commodity volatility or policy shifts. The highest-conviction position is EOSE at 7.6% weight with an exposure score of 72, as Eos Energy Enterprises delivers zinc-based aqueous battery systems for utility-scale and commercial long-duration storage that provide a safer, U.S.-manufactured alternative to lithium-ion for 3- to 12-hour applications, directly supporting grid reliability and renewable integration with proven commercial traction and scaling production.