Atlantic hurricane season is in full swing, and a new disaster recovery-focused exchange-traded fund has launched just in time for it.
The Procure Disaster Recovery Strategy ETF, the first of its kind, invests in companies that are working to reduce risk and drive sustainable recovery from natural disasters around the world.
“Our partners at VettaFi and the team that helped build this index looked at things like hurricanes, floods, droughts, wildfires, tornadoes – natural disasters that happen all over the world – and the companies that are actually stepping in to help us in these efforts,” ProcureAM CEO Andrew Chanin told CNBC’s “ETF Edge” this week.
The ETF, which trades under the symbol FEMA, includes companies from all sectors, including industrials, energy and materials. “These are the companies that really help bring our lives back to normal when we need it most,” Chanin said.
Holdings in the FEMA ETF include communications technology company Fujitsu, risk assessment firm Verisk Analytics, Jacobs Engineering Group and cloud computing firm VMware.
Chanin calls the ETF “a very diverse basket”, comprising companies from various sectors that work on disaster prevention as well as recovery.
Separately, he told CNBC that the creation of the FEMA ETF was inspired by Hurricane Katrina, which hit the Gulf Coast in 2005. While attending school at Tulane University in the New Orleans, Chanin considered the financial and human consequences that accompany major natural disasters.
“One of the first things I did when I was in New Orleans, when we heard Hurricane Katrina was coming, was everyone was going to Home Depot to buy plywood. And then you have to go out there and you have to buy more stuff – whether it’s shingles, whether it’s stuff to fix, whether it’s paint – after these disasters,” Chanin said. ‘a wide range of companies that are all involved at different stages of the life cycle.’
Since 1980, the United States has suffered 323 weather and climate disasters totaling $2.2 trillion in costs, according to the National Centers for Environmental Information, an agency run by the National Oceanic and Atmospheric Administration.
Since its launch on June 1, the FEMA ETF is down about 11%.