WisdomTree has unveiled an exchange-traded fund (ETF) that seeks to provide exposure to energy storage technologies, such as batteries.
According to the firm, the increase in demand for energy storage solutions and developments in battery technologies represents an emerging megatrend.
This growth is driven by global attention to climate change, as well as a shift to mobile devices and “rapidly evolving technologies offering new possibilities”.
In order to capture this opportunity, WisdomTree has partnered with Wood Mackenzie, an energy transition and consulting firm, to create an index that captures the battery value chain.
Stock selection in the WisdomTree Battery Solutions Ucits ETF is informed by Wood Mackenzie. To be eligible for selection, a security must be involved in one or more parts of the value chain (these include raw materials, manufacturing, enablers, and emerging technologies).
Christopher Gannatti, the firm’s head of research for Europe, said: “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.”
According to the ETF specialist, the demand for electric vehicles is likely to be the main catalyst for battery demand, as forecasts suggest battery-powered cars are likely to grow ten-fold by 2040.
“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,” Gannatti added.
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