Nikko Asset Management has launched a new ETF in Singapore providing thematic exposure to Chinese companies driving innovation in electric vehicles and future mobility.
China is the largest electric vehicle market globally.
The NikkoAM-StraitsTrading MSCI China Electric Vehicles And Future Mobility ETF (NIKA SP) has been listed on Singapore Exchange with an expense ratio of 0.70%.
While electric vehicles represent just 3% of the global car fleet today, Bloomberg analysts predict they will account for as much as 60% in 2040. China, already the largest electric vehicle market globally in terms of both production and sales, is expected to continue to lead over the next decades.
Eleanor Seet, President and Head of Asia ex-Japan at Nikko Asset Management, said: “We are exhilarated to be breaking new ground with this newest addition in a thematic asset class that is key to China achieving its carbon-neutral goals by 2060. Electric vehicles and future mobility solutions will change our world and lives indelibly and help make our future more sustainable, making this a compelling investment for investors globally.”
Michael Syn, Head of Equities at Singapore Exchange, added: “Long-term, structural trends within China, fuelled by the powerful combination of technology and sustainability, can drive significant growth potential for this ETF. We have enjoyed many successful partnerships with Nikko Asset Management across asset classes, and this ETF further draws on our collective strengths to offer innovative and efficient solutions for investors.”
Methodology
The fund is linked to the MSCI China All Shares IMI Future Mobility Top 50 Index which selects its constituents from a universe of China-domiciled firms with any global share class eligible for inclusion.
The methodology screens for companies deriving significant revenues from industries linked to the sub-themes of energy storage technologies (including electric vehicles), autonomous vehicles, shared mobility, and new transportation methods.
The index selects the largest 50 firms from the screened universe and weights them by market capitalization subject to an individual security cap of 10%. Reconstitution and rebalancing occur semi-annually.