Horizons ETFs has launched two new ETFs – the Horizons Global Lithium Producers Index ETF (HLIT), and the Horizons Global Hydrogen Index ETF (HYDR) on the Toronto Stock Exchange (TSX).
Each of the ETFs is the first of its kind in Canada in its respective category: the first lithium-focused ETF (HLIT) and the first hydrogen-focused ETF (HYDR).
Together with the Horizons Global Uranium Index ETF (HURA), HLIT and HYDR now form Horizons ETFs’ suite of alternative energy ETFs, which provide exposure to non-traditional, future-focused energy sources and components.
HLIT seeks to replicate, to the extent possible and net of expenses, the performance of an index that is designed to provide exposure to the performance of global, publicly listed companies engaged in the mining and/or production of lithium, lithium compounds, or lithium related components. Currently, HLIT seeks to replicate the performance of the Solactive Global Lithium Producers Index, net of expenses. HLIT seeks to hedge the US dollar value of its portfolio to the Canadian dollar at all times.
HYDR seeks to replicate, to the extent possible and net of expenses, the performance of an index that is designed to provide exposure to the performance of global, publicly listed companies engaged in the development and production of fuel cell technology and equipment, as well as infrastructure, components, and systems for hydrogen generation, storage, and transportation. Currently, HYDR seeks to replicate the performance of the Solactive Global Hydrogen Industry Index, net of expenses. HYDR seeks to hedge the US dollar value of its portfolio to the Canadian dollar at all times.
“The launch of these two first-of-their-kind ETFs today have made it much easier for investors to get diversified exposure to two themes that are instrumental in the development of new technologies,” says Steve Hawkins, President and CEO of Horizons ETFs. “Lithium, as a crucial component in advanced battery technology, and Hydrogen, with its potential to become a low-carbon energy source, are transforming the way we fuel the future. Together with our uranium ETF, HURA, we believe these new ETFs represent the best way for Canadians to harness the investment potential of alternative energies, which going forward are likely to increasingly replace traditional energy sources, like oil and natural gas.”
HLIT offers exposure to companies primarily focused on the mining and/or production of Lithium, the world’s lightest metal, as well as lithium compounds and lithium related components. Lithium is an essential material used in lithium-ion batteries, which play an increasingly important role in areas like electric vehicles and renewable energy storage. The growth of these industries and their dependence on batteries is driving unprecedented demand for lithium, causing lithium miners to rapidly scale operations.
“By 2030, demand for lithium is expected to more than triple, in part due to the continued global transition to electric vehicles from traditional fossil fuel-based vehicles,” says Hawkins. “That effort will not happen without lithium, ensuring its importance for decades to come. HLIT will provide exposure to many of the “upstream” companies that are directly involved in either the extraction of Lithium or its early-stage industrial production for usage in lithium-powered components such as batteries.”
HYDR offers global exposure to hydrogen fuel cell and hydrogen, technology, equipment, generation, storage and transportation companies in developed and emerging markets. Hydrogen is seen as a potential alternative fuel source for ‘de-carbonising’ the economy, with hydrogen fuel cells being two- to three-times more efficient than an internal combustion engine running on gasoline.
“While hydrogen is commonly seen as a ‘fuel of the future’, the fact is that the future is already here: there are more than 40 hydrogen fuelling stations across the United States and that number is growing,” says Hawkins. “The increased rollout of hydrogen-fuelled heavy-duty vehicles could become a key opportunity for the continued transition towards lower-carbon and more sustainable alternative energy sources.”