ETF provider WisdomTree has expanded its commodities ETP range with the launch of a pair of thematic metal ETPs providing exposure to energy transition and battery themes.
Listed on the London Stock Exchange, Borsa Italiana and Börse Xetra, the WisdomTree Energy Transition Metals ETC (WENT) and WisdomTree Battery Metals ETC (WATT) track innovative proprietary indices and have a management expense ratio of 0.45 per cent.
Before fees and expenses, WENT seeks to track the performance of the WisdomTree Energy Transition Metals Commodity Index TR, while WATT seeks to track the performance of the WisdomTree Battery Metals Commodity Index TR.
Expanding its partnership with Wood Mackenzie, an energy transition research and consulting firm, WisdomTree has developed the index strategies with the holdings and weightings of the two baskets designed to capture the demand and growth of specific metals involved in energy transition technologies under the 2-degree scenario. Wood Mackenzie’s market intelligence has already been leveraged by WisdomTree to inform the index strategy framework for its battery solutions ETF, VOLT which captures the battery value chain.
The WisdomTree Energy Transition Metals ETC allows investors to access the key metals involved in the energy transition megatrend including electric vehicles, transmission, charging, energy storage, solar, wind and hydrogen power production. The index is currently comprised of copper, nickel, aluminium, silver, zinc tin, platinum, and gold.
The WisdomTree Battery Metals ETC allows investors to access the key metals involved in the battery theme, a sub-set of the energy transition megatrend, including electric vehicles, charging and energy storage. The index is currently comprised of nickel, aluminium, copper, and zinc.
The indices are reconstituted on an annual basis in January and with a quarterly review process to assess if additional commodity metals, such as cobalt and lithium, can be added depending on the inclusion criteria such as liquidity.
Nitesh Shah, Head of Commodities & Macroeconomic Research, Europe, WisdomTree, says: “COP26 has put climate change and the energy transition back in the spotlight for investors. Policy is starting to catch up to the concerns around the need to decarbonise at a faster pace to align with the Paris Agreement in seeking to keep global warming to well below 2°C, compared to pre-industrial levels. While it is clear that certain commodities are needed to progress the energy transition, it is less clear whether sufficient production of those commodities will take place. Increased demand and supply constraints could propel many commodities for years to come.”
The global economy needs to service the demands of an estimated 10 billion people by 2050 – 25 per cent more than today’s nearly eight billion – while reducing net greenhouse gas emissions levels by 100 per cent over the same period. In order to facilitate the required energy transition and support the proliferation of electric vehicles, energy storage, charging, electricity transmission and distribution cables, solar and wind generation there is expected to be unprecedented levels of demand for certain mined commodities.
Alexis Marinof, Head of Europe, WisdomTree, says: “As the focus on climate change mitigation increases and the energy transition accelerates, specific metals are required to power any decarbonisation efforts. We are now able to deliver a range of ETPs focused on energy transition and battery themes and are applying our successful expert-driven thematic equities approach to new commodities indices, a revolutionary move and a first for the commodities space. These innovative ETPs complement our existing product range, combine our commodities and thematic ETF expertise to delivery truly unique exposures which power the energy transition, arguably the most important megatrend, and seek to address the threat of climate change.”
