WisdomTree has launched two new commodities ETPs in Europe providing exposure to baskets of metals considered essential to the themes of energy transition and battery technology.
Alexis Marinof, Head of Europe, WisdomTree.
The WisdomTree Energy Transition Metals ETP covers key metals deployed within a diverse range of climate-friendly technologies including electric vehicles, charging stations, energy storage systems, and renewable power production (solar, wind, and hydrogen).
The ETP’s allocation is currently directed towards nickel (25.0%), copper (19.9%), aluminum (15.3%), silver (12.9%), zinc (12.0%), tin (7.5%), platinum (4.8%), and gold (2.5%).
The WisdomTree Battery Metals ETP, meanwhile, targets metals deployed within electric vehicles, charging stations, and energy storage systems. Its portfolio currently provides exposure to nickel (47.8%), aluminium (25.6%), copper (16.7%), and zinc (10.0%).
Investment approach
The ETPs are linked to proprietary indices – the WisdomTree Energy Transition Metals Commodity Index and WisdomTree Battery Metals Commodity Index – which were developed in partnership with climate transition consultancy Wood Mackenzie.
The methodology identifies and weights relevant commodities based on Wood Mackenzie’s ‘Intensity Ratings’ which are determined through two metrics: Exposure (what percentage of a commodity’s current production is being allocated to energy transition solutions) and Growth (an estimate of a commodity’s three-year forward consumption versus current consumption within energy transition solutions). The weight of any single commodity is capped at 40%.
Exposure to the selected commodities is obtained through front-month futures contracts. Index reconstitution occurs annually in January, although new metals may be added at quarterly reviews if they satisfy inclusion criteria.
The ETPs track their indices using fully collateralized swaps with BNP Paribas Arbitrage acting as counterparty.
Alexis Marinof, Head of Europe, WisdomTree, said: “We 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 combine our commodities and thematic ETF expertise to deliver truly unique exposures which power the energy transition, arguably the most important megatrend.”
The WisdomTree Energy Transition Metals ETP has been listed on London Stock Exchange in US dollars (WENT LN) and pound sterling (NRGT LN) as well as on Deutsche Börse Xetra (NRGT GY) and Borsa Italiana (WENT IM) in euros.
The WisdomTree Battery Metals ETP has similar listings on LSE (USD: WATT LN; GBP: AMPS LN), Xetra (WATT GY), and Borsa Italiana (WATT IM).
Each ETP comes with an annual management fee of 0.45%.