Multi-asset investment specialist Saxo Bank announces that its theme basket universe is expanding with a new basket focusing on renewable energy.

The basket is the third best performing basket year-to-date as investors are rotating into renewable energy stocks as the EU is accelerating its push to become energy independent from Russia which means massive investments into renewable energy in the coming years.

Previously Saxo had asset owners in renewable energy and manufacturers of equipment for renewable energy in its green transformation basket, but it has decided to spin out renewable energy production (solar, wind, hydro, geothermal, and biomass) into its own separate theme basket.

The key risks to this theme is accelerating commodity prices on raw materials used for renewable energy equipment (steel, silicon, copper, cement etc.).

Due to many client request about access to its theme baskets, Saxo has decided to pursue the availability of these baskets for its clients. Part of this process is streamlining the theme baskets which means that Saxo has decided to reduce theme baskets to 20 stocks. The two first baskets that have been reduced to 20 stocks are the defence and commodities baskets.

In the defence basket Saxo removed the five smallest companies on market value which were Babcock International, Chemring, Invisio, Avon Protection, and Avio.

The commodities basket has been changed in a more dramatic way. First of all, Saxo has changed the name from commodity sector to commodities. Secondly, it has removed chemicals from the basket because it was too high up the value chain of commodities as chemicals are a value-added product and not a raw materials product such as coal, iron ore, or petroleum. By removing chemicals the commodities basket also gets a higher return correlation with the Bloomberg Commodity Total Return Index which is the leading benchmark index on commodities. The commodities basket has also been reduced to 20 stocks with a focus on agriculture, energy, mining, and forest products.