Reference indicator Securities ETF‘ETFS Battery Tech & Lithium ETF has been recharged with the addition of exclusion criteria to filter out companies that do not meet environmental, social and management standards (ESG).
The rules of liquidity and concentration of the benchmark were also changed.
The new ESG standards align the ACDC with the Albanian government’s policy approach, which has made the growth of the electric vehicle market a key part of its plan to reduce emissions and renewable energy.
The new government has pledged to reduce the cost of electric vehicles, exempting many of them from import tariffs and taxes on additional benefits.
He also promised to work with stakeholders to develop a National Strategy for Electric Vehicles, which will develop other measures to increase sales and infrastructure of electric vehicles and stimulate local production of electric vehicle components.
The ACDC tracks the Solactive Battery value chain index, which contains a portfolio of listed companies that provide electromechanical storage technology, and miners that produce metals used to make lithium batteries.
The fund invites investors to learn about the opportunities in the supply chain of battery technologies that are key to the growing markets for electric vehicles and renewable energy sources. The best holdings include lithium Western Australia
Miner Mineral Resources and Pilbara Minerals, the Dutch manufacturer of special metals AMG Advanced Metallurgical, as well as manufacturers Renault SA and Hyundai Electric & Energy System Co.
Solactive has changed the selection methodology to include a number of ESG activity screens. The companies will be inspected for human rights violations, corruption and labor rights, participation in arms production, coal mining and oil and gas production.
In setting up its screens, Solactive has been guided by widely supported ESG conventions, such as the United Nations Global Compact, which sets out sustainable business principles covering work, human rights, the environment and the fight against corruption.
Securities ETF Head of Distribution Kanish Chug says: “This important change in the fund’s selection methodology has taken place after years of customer feedback. It is a recognition that investors who are fond of battery technologies usually care about the environment. “
Further improvement of the selection methodology will allow setting liquidity and concentration limits of holdings.
The ACDC portfolio is worth around A $ 500 million. Since launching in August 2018, profits have averaged 18.3 percent per year, almost double the yield of the MSCI global index over the same period.