ETF Securities has announced it has rebalanced its battery and lithium exchange trade fund (ETF), the ETFS Battery Tech and Lithium ETF (ACDC), in line with the recent changes to its underlying index, the Solactive Battery Technology and Lithium Index, which switched to Clean Horizon as its new data provider from the US Department of Energy.
The change made to the index was the result of the growing demand for pure play battery tech companies and grade lithium producers.
“The index now reflects pure lithium battery storage, in order to capture the growth of this industry. ACDC is a global portfolio covering multiple regions and sectors and adopts an equal weight strategy,” ETF Securities’ chief executive, Kris Walesby, said.
“We know the demand for battery technology is expected to rise substantially in coming years, with personal and commercial storage demands anticipated to pick up later this decade as prices drop. The value chain for battery technology ranges from mining companies, mining for metals like lithium, to manufacturers of battery storage and storage technology providers.”
He said that although the COVID-19 pandemic may have forced temporary slowdown in the renewables and battery production trends, some organisations suggest it could end up accelerating the growth and not just due to volatility in oil and gas prices.
“Battery technology is central to the growth of renewable energy and electric vehicles. So, investors may consider this as an investment in environmental sustainability. It is an established technology with continued innovation and is expected to aid the transition to clean energy,” he said.
“Investors can use this ETF as an ‘alternative’ for exposure to growth in the battery technology thematic. You can also view it as a tactical tilt towards emerging technologies in industrial and materials sectors.”
Performance of the ETFS Battery Tech and Lithium ETF against a sector average since the fund’s inception
