White-label ETF issuer HANetf has reduced the fees of its solar and clean energy ETFs, making the funds amongst the lowest cost in Europe for their respective investment themes.
HANetf has lowered the fees charged on two ETFs providing thematic exposure to clean energy companies.
The $10 million Solar Energy UCITS ETF (TANN LN), Europe’s first dedicated ETF for the global solar energy industry, has seen its total expense ratio (TER) lowered by 20 basis points from 0.69% to 0.49%.
Meanwhile, the $5m HANetf S&P Global Clean Energy Select HANzero UCITS ETF (ZERO LN), which provides global exposure to companies spanning multiple clean energy industries, has experienced a reduction in its TER of 16 basis points from 0.55% to 0.39%.
Both TANN and ZERO are classified as Article 8 products under the European Union’s Sustainable Finance Disclosure Regulation (SFDR).
Following its fee cut, TANN is now one basis point cheaper than the $5m Global X Solar UCITS ETF (RAYZ LN), while Europe’s largest solar energy ETF – the $80m Invesco Solar Energy UCITS ETF (ISUN LN) – costs 0.69%.
There are several ETFs in Europe providing exposure to the broader clean energy investment theme. ZERO is now the second-cheapest amongst these, priced four basis points higher than the Xtrackers MSCI Global SDG 7 Affordable and Clean Energy UCITS ETF (SDG7 LN). The iShares Global Clean Energy UCITS ETF (INRG LN) is by far the largest amongst the lot, housing $5.3 billion in AUM with a TER of 0.65%.
According to HANetf, as the global shift towards renewable energy intensifies, TANN and ZERO’s lower costs will serve to attract a broader range of investors seeking to align their portfolios with sustainable objectives.
Hector McNeil, Founder and co-CEO of HANetf, said: “HANetf is proud to announce the reduced expense ratios for these two cutting-edge ETFs. By significantly lowering the TERs, we are demonstrating our commitment to providing investors with cost-effective and efficient investment solutions, while aligning our offerings with the accelerating demand for clean energy investments.
“Both of these great thematic ETFs at these TER levels will be the lowest cost ETFs covering these popular themes. We believe these reductions will help investors increase their returns across their portfolios.”
Methodologies
TANN tracks the EQM Global Solar Energy Index which selects its constituents from a global universe of stocks with market capitalizations greater than $250 million and average daily trading volume above $2m.
The methodology screens for companies deriving significant revenue from solar-related business operations including the manufacture of photovoltaic cells and energy storage systems, the production of solar power equipment and components, the provision of solar power installation services, and the financing and development of solar projects.
The index applies a modified equal-weight approach whereby ‘core constituents’ – those deriving more than 60% of their revenue from solar-related operations – are allocated double the weight of non-core constituents.
ZERO, meanwhile, is linked to the S&P Global Clean Energy Select Index which measures the performance of companies in global clean energy-related businesses from both developed and emerging markets.
The index has a target constituent count of 100 with eligible companies including those that are active across biofuel, fuel cell technology, geothermal energy, hydroelectricity, solar, and wind power.
ZERO also includes a carbon offset equivalent to the aggregate emissions of the companies in the index prorated to the value of the investment. The carbon offset is paid for within the TER.