The hydrogen ETF space was born in 2021, with the launch of 7 ETFs tracking the global hydrogen segment. Currently, their combined assets under management are around $670 million and have witnessed of $700 million in inflows year-to-date.
The industry recently picked up speed on the rise of fossil fuels prices, with investors betting on increased investments in industries supporting the Paris Climate agreement and the Net-Zero by 2050 goals. French President Macron also revealed a ?30 billion investment plan, which includes funding for green-hydrogen factories. The announcement, along with fuel cell specialist Plug Power recent hydrogen-related deals with Phillips 66 and Airbus, provided an additional push for hydrogen ETFs.
L&G Hydrogen Economy UCITS ETF (HTWO) is the biggest pure hydrogen ETF with $535 million in assets under management. The fund invests in value-creating companies within the hydrogen economy such as energy input, production, transport, storage and end-use. The fund is well diversified across countries (United States 20.8%, United Kingdom 13.2%, Germany 12.8%, South Korea 12%, Japan 12%, other 29.2%) and sectors (Industrials 54.6%, Materials 24.7%, Consumer Discretionary 10.3%, Utilities 6.9% and Information technology 3.5%). Its top 10 constituents include Kolon Industries (5%), Nippon Sanso (4.5%), Doosan fuel cell (4.3%), Toyota Motor (4%) and Cell Impact (3.9%). Since inception on February 10th, 2021, HTWO generated a loss of over 20%. October however is a different story, with more than 5% increase in the fund’s price on the London Stock Exchange.
The fund also trades on the Borsa Italiana, Deutsche Börse and SIX Swiss Exchange, charging an expense ratio of 0.49%
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