Hydrogen, the most plentiful element in the entire universe, serves as one of the promising clean energy sources in the fight against climate change. According to the EU Commission, cumulated investments in renewable hydrogen could reach between 180 and 470 billion EUR by 2050, and it is estimated that, by then, renewable hydrogen will match around one fourth of the global energy demand, with annual revenue of around EUR 630 billion. Legal & General Investment Management (LGIM) realized the vast potential in this development and expanded its broad thematic ETF offering with its new L&G Hydrogen Economy UCITS ETF.
Using a dynamic designed investment strategy that leverages real-time data on companies engaged in the hydrogen value-chain, as provided by GlobalData, the ETF delivers a specialised portfolio of companies. L&G’s hydrogen ETF is based on LGIM’s design process to leverage expert proprietary datasets and active research, which is systematically and rules-based captured by the Solactive Hydrogen Economy Index NTR (the underlying index).
The Solactive Hydrogen Economy Index
The Solactive Hydrogen Economy Index aims to track the performance of a basket of stocks of companies that are actively engaged in the hydrogen industry. Playing a major role in the development of this energy carrier, these companies are expected to benefit from the acceleration in demand and advancements in the hydrogen economy. Eligible companies for the index are selected based on their role in the hydrogen value-chain through the following activities: production of hydrogen and electrolyser technologies, fuel cell manufacturing, hydrogen mobility provider, integrated supply-chain players, and fuel cell component suppliers.
“Hydrogen is the cleanest energy carrier with zero carbon emissions during combustion. Its potential becomes apparent in the context of the ambitious Paris Agreement to limit global warming,” comments Dr. Axel Haus, Team Head Qualitative Research at Solactive. “As advancements in hydrogen technology are increasing, costs among the entire production and value chain of hydrogen are decreasing. Therefore, we envision great potential in LGIM’s new L&G Hydrogen Economy UCITS ETF, and we cannot wait to strengthen our relationship in the field of thematic investing with them going forward.”
The L&G Hydrogen Economy UCITS ETF started trading on the London Stock Exchange, Xetra, Borsa Italiana, and the SIX Swiss Exchange on February 10th, 2021.
