Invesco has launched two new ETFs that focus on the solutions for a net zero economy, a wind energy ETF and a hydrogen ETF.
The ETFs are based on the WilderHill Wind Energy index and WilderHill Hydrogen Economy index, respectfully, with both indexes being equally weighted to about 50 constituents, providing wider exposure rather than a high concentration approach. For example, 23% of names in the wind index are large-cap stocks, while 33% are mid-caps and 44% small-caps.
The Invesco Wind Energy UCITS ETF is composed of firms improving wind turbines and blades, providing materials used in wind energy, modernising the grid, facilitating greater wind energy deployment or expanding its use, both onshore and offshore.
Meanwhile, the Invesco Hydrogen Economy UCITS ETF is composed of firms that deal with improvements to hydrogen generation, storage, conversion, uses in transportation, innovation, and the advancement of fuel cells, with a focus on maximising green hydrogen exposure.
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Firms are excluded from both indexes if they have a significant exposure to fossil fuels or are involved in activities that have adverse impacts on societies and ecosystems from an ESG standpoint.
Gary Buxton, head of EMEA ETFs and indexed strategies at Invesco, said:
Almost half of European ETF flows this year have been into products with an ESG classification, and 40% of those assets were into funds with climate objectives or thematic exposures such as clean energy.
“A theme that is relatively new and largely unknown can offer strong growth potential but requires expertise to identify those companies with meaningful exposure to the theme. That is true for active and passive strategies alike.”
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Chris Mellor, head of EMEA equity and commodity ETF product management at Invesco, added:
As the world begins returning to normality, we should re-focus attention on decarbonisation and increasing our use of cleaner energy sources.
“Global capacity for wind will need to increase by more than 500% by 2050 versus pre-pandemic levels, while hydrogen could have even higher growth potential given a lack of alternative clean energy sources for these industries.”
“The two new Invesco ETFs, in addition to our existing Solar Energy ETF, offer investors effective targeted exposures to these powerful themes. Investors wanting broader exposure across the various clean energy technologies may wish to consider our Invesco Global Clean Energy UCITS ETF.”
Invesco launches two wind and hydrogen ETFs, September 12, 2022