Exposure to the growing trend for energy storage
ETFS Battery Tech & Lithium ETF (ASX code: ACDC) offers investors exposure to the energy storage and production megatrend, including companies involved in the supply chain and production for battery technology and lithium mining. Demand for energy storage is being driven by the movement towards emissions reduction and renewable energy, such as solar and wind.
ACDC aims to provide investors with a return that, before fees and expenses, tracks the performance of the Solactive Battery Value-Chain Index. The Solactive Battery Value-Chain Index represents the performance of companies that are providers of electrochemical storage technology and mining companies that produce metals that are primarily used for the manufacturing of battery-grade lithium batteries.
ACDC uses a full-replication strategy to track the index, meaning that it holds all of the shares that make up the index. It is equal weighted, meaning each holding makes up the same portion of the portfolio each time the index is rebalanced and therefore contributes equally to overall performance.
Why consider ACDC?
Simple, efficient exposure to advances in battery technology and rising demand for lithium.
Global coverage to capture the growth of the industry as a whole.
Liquid and transparent.
Why invest in battery technology?
A battery is a device consisting of one or more electrochemical cells that are capable of generating electrical energy from chemical reactions.
Battery technology is central to the growth of renewable energy and electric vehicle usage, so investors may consider this as an investment in environmental sustainability. It is an established technology with continued innovation and is expected to aid the global transition to clean energy.
Battery technology represents a growth investment for many investors given the projected demand for storage in the coming years off the back of growth in renewables use and the electric vehicle industry.
The value chain for battery technology ranges from mining companies, mining for metals like lithium, to manufacturers of battery storage and storage technology providers. All are potential beneficiaries of the anticipated growth in this industry.
How are the companies in the Index identified?
The index universe for energy storage technology providers is comprised of projects identified from the Clean Horizon’s Energy Storage Source, classified as electrochemical, having an energy capacity of at least 1 MWh and identified as an energy storage technology manufacturer. The companies must also have a primary listing on an eligible exchange – if a subsidiary, then the parent company will be identified as part of the universe instead.
The index universe for mining companies is taken from Fastmarket’s Metal Bulletin, including all companies producing battery grade lithium, with their primary listing on an eligible exchange.
To be included in the index, companies must, have a free float capitalisation of at least US$200m (lower for existing constituents), have a minimum three-month daily trading average of US$1m, and not be classified by FactSet as an “Energy” company.
How are companies in ACDC weighted?
Companies in ACDC are equally weighted, meaning each holding makes up the same portion of the portfolio at each quarterly rebalance and therefore contribute equally to overall performance.
The choice of an equal weighting scheme provides investors exposure to the overall sector without a bias towards large-cap stocks, which tend to dominate where holdings are weighted by market capitalisation.
Why use an ETF for exposure to battery technology?
The value chain for battery technology ranges from mining companies to manufacturers of battery storage and storage technology providers. It is a diverse range of industries spanning the globe and ETFs like ACDC can assist investors in obtaining diversified exposure to newer technologies as well as more established companies. In fast moving and emerging industries, it can be hard to pick the individual winners, so investing in an ETF like ACDC allows investors to access the potential growth across the battery technology megatrend.
How can you use ACDC in a portfolio?
ACDC can be used as a tactical tilt towards emerging technologies in the industrials and materials sector.
As a thematic tilt towards megatrends, including the trend towards renewable energy and electric vehicles.
|Date (NAV)||17 Sep 2020|
|Fund inception date||30 Aug 2018|
|Management Costs (% p.a.)||0.69|
|Maximum cost recoveries (% p.a.)||0.13|
|Legal Form||Managed Investment Scheme|
|Bloomberg Code||ACDC AU Equity|
|Trading hours||10:00AM – 4:00PM|
|Issuer||ETFS Management (AUS) Limited|
|Custodian||JPMorgan Chase Bank N.A. (Sydney Branch)|
|Registrar||Computershare Investor Services Pty Limited|
|Benchmark||Solactive Battery Value-Chain Index|
|Announcement date||24 Jun 2020|
|Ex-date||30 Jun 2020|
|Record date||1 Jul 2020|
|Payment date||15 Jul 2020|
|Distribution per unit |
|12-month franking level||0.00%|
|Portfolio composition file - ETFS Battery Tech & Lithium ETF||18 Sep 2020|
|Factsheet ACDC||10 Sep 2020|
|Condensed Financial Report - For the half-year ended 31 December 2019||11 Mar 2020|
|ETFS Product Disclosure Statement||02 Mar 2020|
|Distribution Reinvestment Policy||02 Mar 2020|