Index provider EQM Indexes has launched the EQM Battery Metals and Mining Index. The index has been designed as investable and is therefore suitable as the underlying exposure for investment products, including ETFs.
Jane Edmondson, CEO and co-founder of EQM Indexes LLC
The index tracks the performance of companies worldwide in the metal and material supply chain for advanced battery technologies. Such batteries include those used in portable devices, electric vehicles (EVs), and electric grid storage for green energy.
“We are excited to offer exposure to global companies developing the raw materials for use in advanced battery chemistries,” said Jane Edmondson, CEO and co-founder of EQM Indexes. “These companies offer investors the opportunity to participate in the growth of battery technology, which is benefiting from accelerating global demand, especially for electric vehicles.”
To be eligible for inclusion in the index, companies must be listed on a regulated stock exchange, have no restrictions on foreign investor ownership, and have market capitalisation of at least $100m. [pullquote]“We are excited to offer exposure to global companies developing the raw materials for use in advanced battery chemistries.”
Jane Edmondson, CEO and co-founder of EQM Indexes[/pullquote]
Companies that are included in the index tend to be major suppliers of elements such as lithium, cobalt, nickel, manganese, graphite.
The index has 44 constituents and is most highly weighted towards Canada and Australia, which have a combined exposure of 50%. The remaining 50% exposure comes from 13 countries, including the UK, US and China.
According to Orbis Research, the global lithium-ion battery market is expected to grow at an impressive compound annual growth rate of 18.7% through 2026. The research firm notes that growing demand, coupled with limited and constrained supply conditions for the metals used in lithium-ion batteries has driven up prices for the metals used in battery chemistries and created the need for additional capacity.
VanEck Europe has recently launched a mining ETF: the VanEck Vectors Global Mining UCITS ETF (GDIG LN) on the London Stock Exchange. GDIG provides investors with exposure to companies which operate in the mining industry and complements the firm’s existing ETF selection which include funds tracking the global gold mining sector. The fund has a total expense ratio of 50bps.