The ETF industry continued its rapid growth in 2022, with 422 new ETFs brought to market as of December 8, a handful more than last year’s already staggering growth. With the variety of ETFs growing and new types of ETFs like this year’s single-stock products arriving all the time, the end of 2022 is an opportunity to look back on some of the more appealing launches, like the battery ETF, the WisdomTree Battery Value Chain and Innovation Fund (WBAT).
Batteries are one of the most talked about economic sectors in recent years, thanks to their anticipated role in the renewable energy transition. From metals like nickel and cobalt to the ever-popular lithium that makes the batteries possible to use in electric vehicles, it’s a burgeoning area that looks set to overcome certain supply challenges.
With the initial hype a bit more realistic since the first battery rush, the time could be now for a battery ETF that diversifies its investments across the entire value chain of battery and energy storage solutions and innovation. WBAT could be a breakout candidate from the ETF class of 2022 given the “when not if” nature of electric vehicles.
The battery ETF, which launched on February 17th, tracks the tier-weighted WisdomTree Battery Solutions Index which divides the value chain into four sections: raw materials, manufacturing, enablers, and emerging tech. To be included, firms have to get at least 50% of its revenue from one of the segments, with a 3.5% single issuer cap for weights.
WBAT charges a 45 basis point fee for its exposures, outperforming the ETF Database Category Average over one month and outperforming the FactSet Segment Average over three months. Adding in $3.6 million in net inflows over the last six months, it has room to grow entering 2023.
While there are other batteries-focused ETFs, WBAT offers a slightly larger focus on the upstream materials that could see a big price upswing once again once the world’s biggest automakers get their electric vehicle production in gear. For investors looking to ride continued innovation in the ETF world, WBAT could be one to watch as it continues to grow and mature.
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