Alternative Investments/ESG: LGIM’s Hydrogen Economy ETF Debuts In Europe

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The ETF will invest in technologies and firms that are enabling the production of cheaper, clean forms of hydrogen.

Legal & General Investment Management (LGIM) has introduced a new ETF to complement its existing range of sustainable thematic ETFs, namely the L&G Clean Energy UCITS ETF and the L&G Battery Value-Chain UCITS ETF. LGIM has launched its L&G Hydrogen Economy UCITS ETF, a vehicle for investors looking to benefit from the global transition to a low-carbon, hydrogen economy. (ETF Express)

The hydrogen economy

The universe of investible firms comprises those likely to play a dominating role in the hydrogen economy. It also includes firms and technologies that are developing cheaper and cleaner forms of hydrogen.

L&G Hydrogen Economy UCITS ETF (HTWO)

The new LGIM ETF will provide investors exposure to the full hydrogen value chain. The ETF will employ a dynamic investing strategy to secure investing opportunities. It will draw from GlobalData’s proprietary database of companies engaged in the hydrogen industry.

It will track the Solactive Hydrogen Economy index which incorporates companies involved in the transition to a low-carbon, hydrogen economy.

The fund will apply a minimum threshold of market cap of US$200 million.

Typical eligible industries are electrolyzer manufacturers, hydrogen producers, fuel-cell manufacturers, specialist mobility providers, fuel-cell component suppliers, key industrial and utility companies, and others in the supply chain.

The scope is immense. The hydrogen economy is expected to be worth US$2.5 trillion in revenues and $11 trillion in infrastructure potential by 2050.

Commenting on the launch, Howie Li, Head of ETFs at LGIM, said: “Access to clean hydrogen will be key to lowering emissions in harder to abate industries where electrification alone is not enough. The commitments being made to the hydrogen economy by governments and businesses around the world are creating long-term investment opportunities with short-term catalysts. We believe this fund offers investors early access to this fast-evolving industry and allows investors the ability to control the amount of hydrogen exposure into their portfolio alongside our clean energy and battery ETFs.

The new LGIM ETF is domiciled in Ireland and is available for a TER of 0.49%.

Related Story:    JP Morgan Launches Carbon Transition Focused Equity ETF

Image:  Coradia iLint – the world’s 1st hydrogen-powered train                                              

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