WisdomTree has launched a battery solutions-themed ETF that trades on the London Stock Exchange.

The WisdomTree Battery Solutions UCITS ETF (LON: CHRG) comes with a total expense ratio (TER) of 0.40%. (ETF Stream)

The fund tracks the price and net dividend performance, before fees and expenses, of the WisdomTree Battery Solutions Index. Further, WisdomTree designed the index in collaboration with energy experts Wood Mackenzie.

Investing rationale

The ETF will invest in public companies in the battery and energy storage solutions (BESS) sector. According to WisdomTree, battery storage is a revolutionary technology with significant potential. The Fund, therefore, chooses companies from raw materials, manufacturing, enablers or emerging technology sectors feeding into the BESS.

“This decade will be key for batteries. As they become cheaper and their deployment accelerates, they will advance the energy transition. Moreover, our integrated understanding of the constantly evolving battery value chain allows us to identify the sectors best positioned to take advantage of this opportunity,” said David Linden, Wood Mackenzie Director – Energy Transition Consulting.

According to forecasts, battery-powered cars are likely to grow ten-fold by 2040. Moreover, nearly half of all passenger car sales will be electric by 2040. The demand for electric vehicles is likely to be the main catalyst for battery demand. However, batteries now also find applications in combination with renewable forms of power such as wind and solar.

Batteries to play an important role in combating climate change

“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. Power and road transport, which together contributed around two-thirds of carbon emissions in 2017, are a clear area of focus for the energy transition. Further, batteries could play a key role in reducing the climate problem alongside the decarbonization policies that have already been rolled out. Lowering carbon emissions is critical if we are to limit the temperature increase to 1.5°C as outlined by the United Nations Paris Agreement,” explained Christopher Gannatti, Head of Research, Europe, WisdomTree.

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