The Overlooked Waste ETF That's Been a Wealth Creator for 15 Years

When investors think environmental investing, they typically picture solar panels and electric vehicles. But they’re missing a massive opportunity sitting right under their noses: the waste management sector. The VanEck Vectors Environmental Services ETF (EVX) proves this blind spot has been costly to ignore.

Numbers That Speak Volumes

Since launching its waste etf tracking the NYSE Arca Environmental Services Index nearly 15 years ago, EVX has quietly quadrupled in value. That’s a remarkable feat for an asset class most portfolio managers barely mention at cocktail parties.

The secret behind this performance lies in the two giants that dominate the sector: Waste Management (WM) and Republic Services (RSG). These companies collectively control approximately 480 out of the nation’s 2,627 landfills. More impressively, both stocks have doubled over just the past five years – a testament to an industry many dismissed as unsexy and uninspiring.

A Recession-Proof Business Model

Here’s what makes waste management genuinely compelling: people never stop throwing things away. Regardless of economic conditions, trash removal is essential infrastructure.

The economics are equally attractive. In 2020, municipal solid waste landfills averaged tipping fees of $53.72 per ton – the charges landfills levy when garbage trucks arrive. For a small landfill, that translates to roughly $1.4 million in annual gate revenue; for large facilities, it reaches $43.5 million annually from tipping fees alone. Since 1982, these fees have nearly tripled, demonstrating consistent pricing power.

The waste etf structure means investors get exposure to WM and RSG as top holdings, representing nearly 20% of EVX’s portfolio weight alongside 22 other environmental services companies.

Hidden Revenue Streams Amplify Returns

Beyond traditional disposal fees, EVX components enjoy two additional wealth-creation mechanisms:

Landfill mining involves extracting recyclable materials from aging disposal sites – generating secondary revenue while advancing sustainability goals.

Methane harvesting represents an even more intriguing opportunity. U.S. landfills currently generate approximately 10.5 billion kilowatt-hours of electricity annually by converting methane emissions into power – enough energy to power roughly 810,000 homes and provide heating for nearly 547,000 more. Each EVX holding capturing this resource creates an additional profit center.

Why This Matters Now

While the waste etf sector rarely captures headlines like growth stocks or trending technologies, its defensive characteristics and fee-based revenue model offer something increasingly precious: predictable returns with minimal market correlation. The concentrated nature of the industry – with just 24 holdings tracked – means investors gain efficient exposure to a genuinely defensive but highly profitable corner of the market.

For portfolio managers seeking both environmental impact and tangible returns, ignoring the waste management opportunity has proven to be a costly mistake.