WisdomTree has added the WisdomTree Renewable Energy Ucits ETF (WRNW) to its range of thematic exchange-traded funds.
WRNW, an Article 9 fund under SFDR, seeks to track the price and yield performance, before fees and expenses, of the WisdomTree Renewable Energy Index.
The index is designed to track the performance of global companies involved in the renewable energy value chain as part of the electrification and decarbonisation megatrend.
These companies must also meet WisdomTree’s ESG criteria.
WRNW has a total expense ratio of 0.45%, listing on 12 June on Börse Xetra and Borsa Italiana, and on the London Stock Exchange on 13 June 2023.
The stock selection of the index is informed and driven by market intelligence from Wood Mackenzie, an energy transition research and consulting firm.
The index tracked by the WisdomTree Renewable Energy UCITS ETF was designed to evolve with rapidly developing technology and the decarbonisation solutions being leveraged to achieve net-zero emissions by 2050.
The world faces a significant challenge to adhere to the Paris Agreement and limit global warming to 1.5 degrees Celsius this century.
To achieve this target, multiple decarbonisation solutions will need to be adopted over the next few decades, with renewable energy sources expected to play a key role within the energy transition.
To be eligible for inclusion in the index, a security must be involved in one or more of the following parts of the value chain.
These are ‘enablers’, for example, battery energy storage systems, raw materials, manufacturing, application, such as companies generating renewable power, and emerging technologies, like floating wind and solar.
According to Wood Mackenzie’s 1.5 degree scenario, electrification and renewables underpin the reduction in CO2 emissions.
The 1.5 scenario requires an estimated $60tn of capital expenditure by 2050, with electrification requirements, utilising solar and wind, driving investment flows.
Emerging technologies, including carbon capture and storage, and hydrogen, at industrial scale, will become critical for decarbonising hard-to-abate sectors as the transition evolves.
Chris Gannatti, global head of research at WisdomTree, said: “The transition towards cleaner and more sustainable energy sources is our best chance of tackling climate change. Renewable energy is at the heart of this endeavour and we see several key drivers that could propel the growth in renewable energy usage.
“Since the war in Ukraine, energy security has been a priority for countries as it became clear the world had to reduce their dependence on fossil fuels. This, coupled with regulatory support to meet net zero targets by 2050 and significant cost reductions in wind and solar power production are creating a perfect storm for renewable and clean energy production.”
The launch of WRNW expands WisdomTree’s partnership with Wood Mackenzie and is the fourth ETP WisdomTree has launched leveraging Wood Mackenzie’s market intelligence and expertise.
The first, the WisdomTree Battery Solutions UCITS ETF (VOLT) launched in 2020, followed by WisdomTree Energy Transition Metals (WENT) and WisdomTree Battery Metals (WATT) in April 2022. WENT and WATT began providing investors with access to cobalt and lithium, in April 2023 when the two metals were added to the exchange-traded products.
