WisdomTree today announced the launch of an ETF that aims to provide investors with exposure to the growth in the demand for and the usage of energy storage technologies, and in particular batteries…
Christopher Gannatti, Head of Research for WisdomTree in Europe
The WisdomTree Battery Solutions UCITS ETF (VOLT), listed today on the London Stock Exchange, seeks to track the price and yield performance, before fees and expenses, of the WisdomTree Battery Solutions Index, and has an expense ratio of 0.40%.
The increase in demand for energy storage solutions and developments in battery technologies represent an emerging megatrend, fuelled by global attention to climate change, a shift to mobile devices, and rapidly evolving technologies offering new possibilities.
As the world decarbonises, renewable energy and electric vehicles are likely to see strong demand growth. Batteries, which are essential for electric vehicles, are increasingly being coupled with variable forms of renewable power generation such as wind and solar to smooth production. Forecasts suggest battery powered cars are likely to grow ten-fold by 2040, with close to half of all passenger car sales being electric by 2040 . The demand for electric vehicles is likely to be the main catalyst for battery demand.
“A combination of environmental, policy and technology factors are driving an essential energy transformation, as we switch away from fossil fuels into clean, renewable sources of energy. Power and road transport, which together contributed around two-thirds of carbon emissions in 2017 , are a clear area of focus for the energy transition. Batteries could play a key role in reducing the climate problem alongside the decarbonisation policies that have already been rolled out. Lowering carbon emissions is critical if we are to limit temperature increase to 1.5°C as outlined by the United Nations Paris Agreement,” explained Christopher Gannatti, Head of Research, Europe, WisdomTree.
WisdomTree has developed, in partnership with Wood Mackenzie, a leading energy transition research and consulting firm, an innovative index that captures the battery value chain. The stock selection is informed by Wood Mackenzie market intelligence. To be eligible for inclusion in the index, a security must be involved in one or more of the following parts of the value chain: raw materials, manufacturing, enablers (correlated technologies and complementary solutions) or emerging technologies. The Index is both geographically and industrially diverse and was designed to evolve with rapidly developing technology.
David Linden, Wood Mackenzie Director – Energy Transition Consulting, said: “This decade will be key for batteries. As they become cheaper and their deployment accelerates, they will advance the energy transition. Our integrated understanding of the constantly evolving battery value chain allows us to identify the sectors best positioned to take advantage of this opportunity”
Rafi Aviav, Head of Product Development, Capital Markets and Technology, Europe, WisdomTree added, “The combined expertise of WisdomTree and Wood Mackenzie brings investors intelligent access to a high growth, emerging sector. Batteries and, more broadly, energy storage solutions, are driving mobile computing, electric vehicles and more developments enabling new efficiencies and possibilities across industries. VOLT offers a uniquely refined access to this investment opportunity through intelligent allocation across the value-chain, tilting towards the highest growth sectors.”
The WisdomTree Battery Solutions UCITS ETF is the newest addition to WisdomTree’s thematics range which also includes the WisdomTree Artificial Intelligence UCITS ETF (WTAI) and the WisdomTree Cloud Computing UCITS ETF (WCLD).
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