WisdomTree has rolled out the the WisdomTree Strategic Metals UCITS ETF, which seeks to target exposure to the metals driving the energy transition.
The strategy, which has a 0.55% total expense ratio, will list tomorrow (15 January) on the London Stock Exchange. It is also available to European investors on the Börse Xetra and Borsa Italiana.
Classified as an article 8 SFDR fund, it aims to offer investors access to commodities associated with energy transition themes such as electric vehicles, transmission, charging, energy storage, solar, wind and hydrogen production.
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The ETF will track the underlying WisdomTree Energy Transition Metals Commodity UCITS Index.
Through a partnership with data solutions firm Wood Mackenzie, the selection and weighting of the underlying metals will be based on a forward-looking rating system.
The metals are given an ‘intensity rating’, which combines the demand growth forecast for the metal over three years with a market balance rating that reflects whether the metal is under or over supplied. The portfolio then rebalances twice a year.
Nitesh Shah, head of commodities and macroeconomic research, Europe, at WisdomTree, said: “Metals will be crucial to advance the energy transition. Whether it is to power more electric vehicles or create solar panels, it’s hard to see a world where the development of energy transition technologies is not dependent on the supply of some key metals. However, the challenge is to ensure that the technologies needed to achieve the energy transition are produced at scale.
“The challenge for investors is to navigate through the dynamics of technology shifts, trade policies and sudden increases in metal supply. The expertise offered by our partnership with Wood Mackenzie and a methodology that incorporates both supply and demand drivers help the strategy remain highly adaptive to the evolving market.”