ETF Securities has launched a hydrogen-focused exchange traded fund (ETF) to compete for demand for clean energy ETFs.
It targeted pure play companies that produced hydrogen fuel cells and their components, made hydrogen refuelling stations and other infrastructure like storage, and companies that generated hydrogen or build electrolysers.
It tracked the Solactive Global Hydrogen ESG index which had returned 48% over the year to 31 August, 2021.
ETFS head of product, Evan Metcalf, said the fund included an environmental, social and governance (ESG) filter, which used data from Minerva Analytics to exclude companies involved in controversial weapons, small arms, gambling tobacco and fossil fuels, as well as those non-compliant with the United Nations Global Compact. The fund also removed oil, gas and coal companies as those often produced brown and grey hydrogen.
ETFS head of distribution, Kanish Chugh, said the ETF aligned with the company’s focus on providing investment opportunities that tapped into social and economic megatrends.
“The hydrogen economy is a greenfield investment opportunity, still in its early development stage,” Chugh said.
“However, its potential applications are limitless – from making fertiliser to powering the world’s transport systems.”
“Hydrogen may be like the internet in the 1990s, or semiconductors in the 1970s. In these instances, disruptive technologies reached tipping points and saw exponential uptake. Their uptake was driven by megatrends – which are one-off structural shifts in the economy and society.”
Betashares and VanEck had both launched climate change ETFs earlier in the year.
