As our cherished home, protecting and preserving Planet Earth should be our utmost priority. Unfortunately, years of rampant pollution, deforestation, overconsumption and other harmful practices have contributed to the acceleration and exacerbation of climate change. Consequently, we are witnesses and victims to a growing number of severe weather events and natural disasters globally.
In honor of Earth Day, ProcureAM acknowledges the urgent need for action to mitigate the risks of climate change, highlighting the pivotal role the private sector plays in ensuring safety and preparedness in the face of natural disasters.
According to a report released by the U.N’s Intergovernmental Panel on Climate Change (IPCC), nearly half of the global population lives in regions that are ‘highly vulnerable’ to climate change. Additionally, highly vulnerable regions experienced 15 times more deaths caused by floods, droughts and storms.1
Several major and unexpected catastrophic events devastated communities around the world in 2023 alone. Parts of Turkey and Syria were destroyed by a 7.8 magnitude earthquake in February,2 which resulted in thousands of deaths and left behind a massive economic toll; most of the infrastructure in affected areas were severely damaged or wiped out completely.
California endured a series of treacherous storms and floods that left residents trapped amidst overflowing rivers and mudslides. The adverse effects have extended to the state’s agricultural sector. Some farms are fully submerged by floodwaters and others are too waterlogged to support cultivation.3 This could have far-reaching implications throughout the United States. If farmers are unable to sow their intended crops, the harvest and distribution of food could suffer, leading to food insecurity issues.
These are not the only climate-related disasters that have occurred this year and with hurricane season approaching, we could see more. What can we do to prevent natural disasters from ravaging our communities? There are many private companies dedicated solely to risk reduction and recovery efforts that are called into action during natural disaster emergencies. When creating the Procure Disaster Recovery Strategy ETF (FIXT), we sought out global companies engaged in those exact practices, whether they build infrastructure strong enough to withhold potential earthquakes or provide emergency response following disasters.
Officials in Turkey and Syria will likely explore different construction strategies that rely less on concrete as a building material. Fugro,* a Dutch firm that analyzes the Earth’s stability for building, may be in demand for this reason. In fact, Fugro was previously hired to conduct ground analysis for a nuclear reactor construction project in Turkey.
With the impact from the California floods, issues with the power grid may have been mitigated by generator manufacturers like Generac,* Cummins* and Xylem*. Further, the unstable farmland could potentially be contaminated from debris and other toxic materials. To help address the contamination, companies involved in water management, sanitation and flood control could step in such as Xylem,* Wood Group,* Sulzer,* Stantec,* and Tetra Tech.*
As investors, we can play our part by funding, supporting and acknowledging the companies working collectively towards natural disaster preparedness and resilience to protect our Earth and future.
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1CNBC, March 23, 2023, World’s top climate scientists issue ‘survival guide for humanity,’ call for major course correction.
2The Wall Street Journal, February 9, 2023, Why the Turkey-Syria earthquake was so destructive and deadly.
3Fox40.com, March 31, 2023, California’s farmers struggle with deepening flood waters.
*As of April 19th, 2024, Cummins (CMI) was 2.64% holding, Fugro (FUR NA) was a 2.59% holding, Generac (GNRC) was a 2.82% holding, John Wood Group (WG/ LN) was a 2.38% holding, Stantec (SNT CN) was a 2.26% holding, Sulzer (SUN SW) was a 2.49% holding, Tetra Tech (TTEK) was a 2.39% holding, and Xylem (XYL) was a 2.40% holding in the Procure Disaster Recovery Strategy ETF (NASDAQ: FIXT).
Please consider the Funds investment objectives, risks, and charges and expenses carefully before you invest. This and other important information is contained in the Fund’s summary prospectus and prospectus, which can be obtained by visiting procureetfs.com. Read carefully before you invest.
Investing involves risk. Principal loss is possible. The Fund is also subject to the following risks: Shares of any ETF are bought and sold at market price (not NAV), may trade at a discount or premium to NAV and are not individually redeemed from the funds. Brokerage commissions will reduce returns. Securities of small- and mid-capitalization companies may experience much more price volatility, greater spreads between their bid and ask prices and significantly lower trading volumes than securities issued by large, more established companies. The Fund is not actively managed so it would not take defensive positions in declining markets unless such positions are reflected in the underlying index. Please refer to the summary prospectus for a more detailed explanation of the Funds’ principal risks. It is not possible to invest in an index.
Natural Disaster/Epidemic Risk – Natural or environmental disasters, such as earthquakes, fires, floods, hurricanes, tsunamis and other severe weather-related phenomena generally, and widespread disease, including pandemics and epidemics, have been and may be highly disruptive to economies and markets, adversely impacting individual companies, sectors, industries, markets, currencies, interest and inflation rates, credit ratings, investor sentiment, and other factors affecting the value of the Fund’s investments.
Foreign Investment Risks – Foreign securities are typically more volatile, harder to price, and less liquid than U.S. securities.
American Depositary Receipt Risk (ADR)-ADRs involve risks like those associated with investments in foreign securities, including changes in political or economic conditions of other countries and changes in the exchange rates of foreign currencies. ADRs listed on U.S. exchanges are issued by banks or trust companies and entitle the holder to all dividends and capital gains paid out on the underlying foreign shares. Investing in ADRs as a substitute for an investment directly in the foreign company shares, exposes the Fund to the risk that the ADRs may not provide a return that corresponds precisely with that of the foreign company’s shares.
The Procure Disaster Recovery Strategy ETF is neither associated with, nor endorsed by, the Federal Emergency Management Agency.
The Procure Disaster Recovery Strategy ETF is distributed by Quasar Distributors LLC.
This year began with horrific earthquakes in Turkey and Syria, monumental atmospheric rivers in California, and a railroad derailment in Ohio resulting in a major hazardous chemical spill. The damage from these disasters needs to be addressed and steps have to be taken to prevent future destruction. The affected areas will require help, but who do they call?
Fortunately, there is an industry comprised of companies providing disaster recovery and prevention products and services. With natural disasters occurring more frequently and becoming more destructive, the market for disaster recovery and prevention is poised to grow. After a major disaster, a timely response is essential. Firms with experience are best equipped to assess the damage and implement short- and long-term recovery plans.
Earthquakes in Turkey and Syria
The devastating earthquakes in Turkey and Syria affected nearly 15 million people and destroyed twelve thousand buildings. Going forward, housing, schools and hospitals will need to be rebuilt and water supplies restored.1 A recent World Bank estimate put the cost of direct physical damage at almost $34.2 billion and total reconstruction and recovery at nearly twice that amount!2
The quakes highlighted the inconsistency in building code adherence throughout the region. Amazingly, some buildings withstood the impact while others were destroyed. In the future, stricter adherence to building codes will be enforced and new construction processes will be investigated with changes like less reliance on concrete as a building material adopted. Companies like Fugro,* a Dutch firm that analyzes earth stability for building may be in demand. Not that long ago they were hired to analyze the ground prior to construction of a nuclear reactor in Turkey.3
California Atmospheric Rivers and Flooding
Nonstop atmospheric rivers have been pounding California with unprecedented snowstorms and rainfalls. Floods, lack of power, and mudslides are just some of the fallout from these weather disasters. Levees that had been in danger for years have been breached. While it may be too late to prevent the current damage, federal and state agencies have announced funding for repairs. The USDA Natural Resources Conservation Service in California recently announced $1.5 million to repair levees in Northern California.4 Belatedly, a $400 million levee rebuild is scheduled for 2025.5
Mudslides, blocked and damaged roadways, weakened bridges, and other damaged infrastructure will need to be repaired. In the short-term, the lack of power may be handled with generators from companies like Generac,* Cummins,* and Xylem.* Meanwhile longer-term solutions may require the new microgrids by companies like Eaton,* Enersys* and Willdan.* Microgrids may help to transmit energy during periods of power disruptions. A recent industry study forecasted the global microgrid market to increase by 18.6% between 2022 and 2027.6
Flooding has been a major consequence of the historic storms pounding California. The state will have to contend with contaminated water supplies and flooded residential and commercial properties. An unintended consequence of flooding has been the damage to farmland. Farmland may become unusable according to Federal regulations because the soil may have become contaminated from debris and other contaminants. Water management, sanitation, and flood control are markets for companies like Xylem,* Wood Group,* Sulzer,* Stantec,* Clean Harbors,* and TetraTech.*
Norfolk Southern Derailment
In the case of the Norfolk Southern rail crash, instant action was taken to analyze the water and air samples in the area. AECOM* was brought in immediately to analyze water samples. TetraTech* and Arcadis* have been deployed to clean the water and streams that were contaminated by the chemical spill and to excavate and replace soil adjacent to the affected train tracks. Much of this work will be funded by the railway. Meanwhile, AECOM* as well as the Ohio Environmental Protection Agency, will be monitoring and testing in the area for the foreseeable future.7
The Disaster Recovery and Prevention Industry is an essential and growing industry. Whether it’s from natural disasters like earthquakes, floods, hurricanes, blizzards, droughts and wildfires, or manmade hazards, the resulting destruction will need to be repaired. The companies providing the products and services to facilitate a return to normal will continue to be busy.
*As of March 20th, 2023, AECOM (ACM) was a 1.91% holding, Arcadis (ARCAD NA) was a 1.90% holding, Clean Harbors CLHJ) was a 1.99% holding, Cummins (CMI) was 1.81% holding, Eaton Corp (ETN) was a 1.86% holding, Enersys (ENS) was a 1.85% holding, Fugro (FUR NA) was a 1.90% holding, Generac (GNRC) was a 1.95% holding, John Wood Group (WG/ LN) was a 1.89% holding, Stantec (SNT CN) was a 2.00% holding, Sulzer (SUN SW) was a 1.82% holding, Tetra Tech (TTEK) was a 2.06% holding, Willdan Group (WLDN) was a 1.93% holding, and Xylem (XYL) was a 1.92% holding in the Procure Disaster Recovery Strategy ETF (NASDAQ: FIXT).
1 What Turkey Needs for Its Long Recovery, Insights.som.yale.edu, February 17, 2023.
2 Turkey’s crisis management playbook: Donations, reconstruction, and inflation with an eye on elections, Mei.edu, M. Murat Kubilay, March 3, 2023.
3 Fugro’s Site Characterization Supports Safe Design of Turkey’s Second Nuclear Power Plant, Fugro.com, August 12, 2021.
4 NRCS California Awards Federal Funding for Emergency Levee Repairs, nrcs.usda.gov, February 24, 2023.
5 Levee break brings more flood problems to California as new storm approaches, PBS.com, March 13, 2023.
6 Microgrid Market by Connectivity… Global Forecast to 2027, Marketsandmarkets.com, July2022.
7 NTSB Issues Initial Ohio Derailment Report as EPA Takes Over Cleanup, enr.com, February 2023.
Please consider the Funds investment objectives, risks, and charges and expenses carefully before you invest. This and other important information is contained in the Fund’s summary prospectus and prospectus, which can be obtained by visiting procureetfs.com. Read carefully before you invest.
Investing involves risk. Principal loss is possible. The Fund is also subject to the following risks: Shares of any ETF are bought and sold at market price (not NAV), may trade at a discount or premium to NAV and are not individually redeemed from the funds. Brokerage commissions will reduce returns. Securities of small- and mid-capitalization companies may experience much more price volatility, greater spreads between their bid and ask prices and significantly lower trading volumes than securities issued by large, more established companies. The Fund is not actively managed so it would not take defensive positions in declining markets unless such positions are reflected in the underlying index. Please refer to the summary prospectus for a more detailed explanation of the Funds’ principal risks. It is not possible to invest in an index.
Natural Disaster/Epidemic Risk – Natural or environmental disasters, such as earthquakes, fires, floods, hurricanes, tsunamis and other severe weather-related phenomena generally, and widespread disease, including pandemics and epidemics, have been and may be highly disruptive to economies and markets, adversely impacting individual companies, sectors, industries, markets, currencies, interest and inflation rates, credit ratings, investor sentiment, and other factors affecting the value of the Fund’s investments. Foreign Investment Risks – Foreign securities are typically more volatile, harder to price, and less liquid than U.S. securities.
Foreign Investment Risks – Foreign securities are typically more volatile, harder to price, and less liquid than U.S. securities.
American Depositary Receipt Risk (ADR)-ADRs involve risks like those associated with investments in foreign securities, including changes in political or economic conditions of other countries and changes in the exchange rates of foreign currencies. ADRs listed on U.S. exchanges are issued by banks or trust companies and entitle the holder to all dividends and capital gains paid out on the underlying foreign shares. Investing in ADRs as a substitute for an investment directly in the foreign company shares, exposes the Fund to the risk that the ADRs may not provide a return that corresponds precisely with that of the foreign company’s shares.
The Procure Disaster Recovery Strategy ETF is neither associated with, nor endorsed by, the Federal Emergency Management Agency.
The Procure Disaster Recovery Strategy ETF is distributed by Quasar Distributors LLC.
Natural disasters are an unfortunate reality that can strike anywhere at any time. By the end of this century, the U.S. Government predicts that damages from hurricanes, wildfires, floods, droughts, severe storms, and earthquakes could cost the U.S. Federal budget about $2 trillion each year.1 However, corporations involved with the recovery and prevention of natural disasters could see revenue increases while helping to minimize the destruction from natural disasters.
The Procure Disaster Recovery Strategy ETF (NASDAQ: FIXT) is the first exchange-traded fund to invest in a portfolio of worldwide companies that are engaged in recovery and risk reduction efforts as a result of natural disasters.
The corporations found within the FIXT ETF span numerous industries. These industries offer natural disaster recovery and prevention products and services, from home improvement companies selling flashlights and shovels to consulting and engineering firms that plan, design and build bridges, energy grids, and worldwide water systems. The constituents in the FIXT ETF encompass a range of needs created by natural disasters
By 2030, the UN predicts 560 disaster events a year (1.5 each day!)2. Already the world has experienced flooding in Yellowstone National Park, Kentucky, Nigeria, and China. Wildfires have created havoc in California, Spain, France, and Hawaii. Summer droughts and heatwaves this year have burdened the United States, Europe, and China. Mexico has experienced earthquakes. Most recently, hurricanes have brought destruction to Puerto Rico, Cuba, Canada, and Florida.
Without the ability and resources of companies to help communities recover and build back safer and stronger, damage will be even more devastating. The FIXT ETF highlights the firms who step up when natural disasters occur. For more information on the Procure Disaster Recovery Strategy ETF, visit www.ProcureETFs.com.
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1 https://www.cnbc.com April 4, 2022.
2 https://news.un.org April 26, 2022.
*As of October 4th, 2023, AECOM (ACM) was a 2.01% holding, Fluor (FLR) was a 2.11% holding, Generac (GNRC) was a 1.89% holding, Home Depot (HD) was a 1.91% holding, Hornbach Holdings (HBH GR) was a 1.83% holding, John Wood Group (WG/ LN) was a 1.88% holding, Kingfisher (KGF LN) was a 1.98% holding, Lowe’s (LOW) was a 1.85% holding, NEC Corporation (6701 JP) was a 2.16% holding, Tetra Tech (TTEK) was a 2.08% holding, VMWare (VMW) was a 2.16% holding, Wesfarmers Ltd (WES AU) was a 2.10% holding, and Xylem (XYL) was a 2.03% holding in the Procure Disaster Recovery Strategy ETF (NASDAQ: FIXT).
Please consider the Funds investment objectives, risks, and charges and expenses carefully before you invest. This and other important information is contained in the Fund’s summary prospectus and prospectus, which can be obtained by visiting procureetfs.com. Read carefully before you invest.
Investing involves risk. Principal loss is possible. The Fund is also subject to the following risks: Shares of any ETF are bought and sold at market price (not NAV), may trade at a discount or premium to NAV and are not individually redeemed from the funds. Brokerage commissions will reduce returns. Securities of small- and mid-capitalization companies may experience much more price volatility, greater spreads between their bid and ask prices and significantly lower trading volumes than securities issued by large, more established companies. The Fund is not actively managed so it would not take defensive positions in declining markets unless such positions are reflected in the underlying index. Please refer to the summary prospectus for a more detailed explanation of the Funds’ principal risks. It is not possible to invest in an index.
Natural Disaster/Epidemic Risk – Natural or environmental disasters, such as earthquakes, fires, floods, hurricanes, tsunamis and other severe weather-related phenomena generally, and widespread disease, including pandemics and epidemics, have been and may be highly disruptive to economies and markets, adversely impacting individual companies, sectors, industries, markets, currencies, interest and inflation rates, credit ratings, investor sentiment, and other factors affecting the value of the Fund’s investments. Foreign Investment Risks – Foreign securities are typically more volatile, harder to price, and less liquid than U.S. securities.
The Procure Disaster Recovery Strategy ETF is neither associated with, nor endorsed by, the Federal Emergency Management Agency.
The Procure Disaster Recovery Strategy ETF is distributed by Quasar Distributors LLC.
As we recognize the United Nations’ International Day for Disaster Reduction, Puerto Rico and Florida are just beginning the long road to recovery from Hurricanes Fiona and Ian. The death toll from these storms is already over 100 and unfortunately, is likely to rise, while the financial impact is estimated to be in the billions.1 These catastrophic storms serve as a stark reminder that the frequency and intensity of natural disasters are increasing and reinforce the importance of this year’s UN theme of early warning and disaster risk reduction. This devastating hurricane season also takes me back to my own experiences with Hurricanes Katrina and Sandy — the connection behind the Procure Disaster Recovery Strategy ETF (FEMA).
It was the last week of August in 2005, I had just arrived in New Orleans to start my junior year at Tulane University when Hurricane Katrina evacuations began. My friends and I headed to Baton Rouge to escape the brunt of the storm — the one-hour drive took five as many tried to flee. I remember watching the news, realizing this would be a catastrophic, life-changing event.
After the storm passed, the fall semester was canceled and I made my way home to New Jersey, struggling to find gas along the way and sleeping in a car because hotels were full.
The following year, Tulane reopened, despite sustaining $100 million in damages. I returned that fall to campus overwhelmed with emotions — it was incredible to reunite with friends, but you were constantly reminded by the impact of that violent hurricane. This city I loved was a fractured version of its former self with homes destroyed and communities dispersed. Despite the destruction, it is beautiful to see the significant progress New Orleans has made to restore its traditions and culture while making investments to better protect the city and its inhabitants in the future.
Seven years later while living in New York City, I saw similar destruction after Hurricane Sandy ripped through the Northeast. Having grown up in neighboring New Jersey, it was difficult to see the state where my friends and family live struggling to rebuild in the aftermath of the storm. Living through these two storms really put the disaster recovery industry into perspective for me personally. While these storms each felt like once-in-a-lifetime events, the reality is natural disasters are increasing in frequency and severity. The White House believes that damages from hurricanes, wildfires, floods, droughts, severe storms and earthquakes could cost the US Federal budget $2 trillion per year by the end of the century.2
It was these experiences with Katrina and Sandy which resonated with me during the creation of the FEMA ETF, which we launched in June of this year. The Procure Disaster Recovery Strategy ETF is the first fund to invest in global companies engaged in mitigating the risk and recovering from natural disasters. The FEMA ETF is the culmination of my experiences with natural disasters and my background in the thematic ETF space. Public sector investment in natural disaster recovery is not enough — the private sector plays a critical role in minimizing the impact of these events.
This year, as we observe the International Day for Disaster Reduction, the focus is on increasing the availability of multi-hazard early warning systems, as well as disaster risk information and assessment, by 2030. Early warning is quite literally the difference between life and death. The ability to not only predict the strength of these events, but also pinpoint the areas that will be most impacted, allows for preparations to preserve life and property. Several of the companies within the FEMA ETF play a critical role in risk reduction, including Maxar Technologies* (MAXR), which uses satellite imagery to track hurricanes, wildfires and other impending disasters in order to prepare areas of impact. Other companies, including Jacobs Solutions* (J) and AECOM* (ACM), are global leaders in helping communities enhance disaster resiliency and adapt to climate change.
By 2030, the United Nations estimates there will be 500 major natural disaster events a year, each one costing more than $1 billion — that’s 1.5 events per day.3 The startling numbers remind us why disaster prevention and mitigation is vital, and it’s why ProcureAM believes it’s necessary that companies working in this space are funded and championed.
1 https://www.cnbc.com October 3, 2022.
2 https://www.cnbc.com April 4, 2022.
3 https://news.un.org April 26, 2022.
*As of September 30th, 2022, AECOM (ACM) was a 1.64% holding, Jacobs Solutions (J) was a 1.58% holding, and Maxar (MAXR) was a 1.47% holding in the Procure Disaster Recovery Strategy ETF (NASDAQ: FEMA).
Please consider the Funds investment objectives, risks, and charges and expenses carefully before you invest. This and other important information is contained in the Fund’s summary prospectus and prospectus, which can be obtained by visiting procureetfs.com. Read carefully before you invest.
Investing involves risk. Principal loss is possible. The Fund is also subject to the following risks: Shares of any ETF are bought and sold at market price (not NAV), may trade at a discount or premium to NAV and are not individually redeemed from the funds. Brokerage commissions will reduce returns. Securities of small- and mid-capitalization companies may experience much more price volatility, greater spreads between their bid and ask prices and significantly lower trading volumes than securities issued by large, more established companies. The Fund is not actively managed so it would not take defensive positions in declining markets unless such positions are reflected in the underlying index. Please refer to the summary prospectus for a more detailed explanation of the Funds’ principal risks. It is not possible to invest in an index.
Natural Disaster/Epidemic Risk – Natural or environmental disasters, such as earthquakes, fires, floods, hurricanes, tsunamis and other severe weather-related phenomena generally, and widespread disease, including pandemics and epidemics, have been and may be highly disruptive to economies and markets, adversely impacting individual companies, sectors, industries, markets, currencies, interest and inflation rates, credit ratings, investor sentiment, and other factors affecting the value of the Fund’s investments. Foreign Investment Risks – Foreign securities are typically more volatile, harder to price, and less liquid than U.S. securities.
The Procure Disaster Recovery Strategy product is neither associated with, nor endorsed by,
the Federal Emergency Management Agency.
Procure Disaster Recovery Strategy ETF (FEMA) is distributed by Quasar Distributors LLC.