Electric vehicle demand prompts battery ETF launch

WisdomTree has launched a Battery Solutions product on demand for renewable energy and electric vehicles

ETF provider WisdomTree has launched a Battery Solutions product as demand for renewable energy and electric vehicles picks up pace

Listed on the London Stock Exchange, the WisdomTree Battery Solutions UCITS ETF (VOLT) will be exposed to an index that captures the battery value chain. It was developed by the firm in partnership with Wood Mackenzie, an energy transition research and consulting firm.

Securities in the index 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 demand for energy storage solutions and developments in battery technologies represent an “emerging megatrend”, WisdomTree said.

For example, 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 group said.

With the shift to mobile devices also firmly underway, there is likely to be “strong demand growth” for batteries.

Christopher Gannatti, head of research, Europe, explained:“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.”

David Linden, director – energy transition consulting at Wood Mackenzie, added: “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.”

The new ETF will sit alongside WisdomTree’s thematic range, whicj includes the WisdomTree Artificial Intelligence UCITS ETF and the WisdomTree Cloud Computing UCITS ETF.

VOLT carries a TER of 0.40%.

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Natalie Kenway

Natalie is global head of ESG insight for ESG Clarity and has been an investment journalist for 16 years. She won Editor of the Year at the Aviva Investors Sustainability Media Awards 2021, and was Winner...