There’s an ETF for That? Blue Collar Trades

VanEck Environmental Services ETF

EVX

-0.44%

EVX has been around since October 2006, though it has struggled to consistently attract assets. At $91 million in AUM, it sits above the $50 million “death zone” that often puts ETFs at risk of closure, but just barely.

Notably, after December 19, 2025, the fund will change its benchmark index, investment objective, and principal investment strategy. For now, however, it continues to track the NYSE Arca Environmental Services Index.

One of the appealing aspects of thematic ETFs like EVX is that they can capture broader exposure than traditional sector ETFs tied strictly to GICS classifications. The ETF covers companies involved in waste collection, transfer, and disposal services, recycling, soil remediation, wastewater management, and environmental consulting. This makes for an eclectic mix spanning not only industrials, but also utilities and parts of the materials sector.

Standouts in the portfolio include the oligopoly of Waste Management, Republic Services, and Waste Connections, which dominate the North American waste management industry.

Investors also get exposure to specialty names such as Clean Harbors, which focuses on hazardous waste disposal and environmental emergency response, and Ecolab, which provides water treatment and hygiene solutions across industries.

The fund definitely skews large cap, with 71% of holdings above $5 billion in market cap, 25% in mid caps between $1 billion and $5 billion, and the remainder in small caps under $1 billion. The weighted average market cap is $33 billion.

At 0.55%, the expense ratio is right around average for a thematic index ETF, with a small 0.07% waiver from the gross fee of 0.62%. Performance has held up well in recent years, with a three-year annualized return of 13.18%.

AdvisorShares HVAC & Industrials ETF

HVAC

-1.38%

Launched in February 2025 on NYSE Arca, HVAC is a newcomer that has so far struggled to gain traction, with only $3 million in AUM—well within the ETF “death zone.”

Despite that, I think the idea behind it is excellent and genuinely unique. The challenge with launching niche ETFs is always finding an audience. Before reading this, how many investors ever considered allocating to HVAC as a theme?

AdvisorShares makes the case that HVAC is a booming industry, driven by advances in property technology like smart thermostats, air purifiers, advanced control systems, and more energy-efficient designs. Longer-term trends such as global warming and population growth provide secular tailwinds.

Beyond installation, many firms generate revenue from maintenance, repair, design, and distribution, and their customer base includes both residential and commercial markets. In other words, wherever people live or work, there is a demand for heating and cooling. That said, the industry is cyclical, tied to factors like new construction, renovation cycles, and urbanization trends.

The portfolio is industrials-focused. Core holdings include HVAC manufacturers and building technology leaders such as Trane Technologies, Johnson Controls, and Carrier Global. It also holds companies involved in installation and service, like Comfort Systems USA, and suppliers such as SPX Technologies.

An interesting omission is Watsco, a distributor, while its larger counterpart, Ferguson, is included. As an actively managed fund, the allocations reflect the manager’s preferences.

The main drawback is the cost. At 0.89%, the expense ratio is steep, even by active thematic ETF standards. This likely contributes to its slow asset growth. Cutting it closer to 0.75%, which has become the norm for active thematic strategies, could make HVAC more appealing to investors and help it scale beyond its early struggles.

Please note that this article reflects the author’s personal views and does not represent the opinions of the publication or its affiliates. It is for informational purposes only and does not constitute investment advice. It is essential to seek guidance from a registered financial professional before making any investment decisions.