WisdomTree has launched a new thematic equity ETF in the US providing global exposure to companies involved in battery and energy storage solutions.

Jeremy Schwartz, Global Chief Investment Officer at WisdomTree.
The WisdomTree Battery Value Chain and Innovation Fund (WBAT US) has been listed on Cboe BZX Exchange with an expense ratio of 0.45%.
According to WisdomTree, increasing demand for energy storage solutions and developments in battery technologies represent an emerging megatrend, fuelled by global attention to climate change, a shift to mobile devices, and rapidly evolving technologies offering new possibilities.
The firm believes the demand for electric vehicles is likely to be the main catalyst for battery demand. Batteries, which are essential for electric vehicles, are increasingly being coupled with various forms of renewable power generation such as wind and solar to smooth production. Wood Mackenzie forecasts suggest battery-powered cars are likely to grow ten-fold by 2040, with close to half of all passenger car sales being electric by 2040.
Jeremy Schwartz, Global Chief Investment Officer at WisdomTree, said: “As the world shifts towards renewable energy, due to environmental and technological drivers, we expect a growing demand for electric vehicles and the batteries central to their development. The WisdomTree Battery Value Chain and Innovation Fund was built for investors looking to gain exposure to battery technologies and the megatrend of energy transformation.”
Methodology
The fund is linked to the proprietary WisdomTree Battery Value Chain and Innovation Index which selects its constituents from a universe of developed and emerging market stocks with market capitalizations greater than $250 million and average daily trading values above $1m. Chinese A-shares are only eligible for inclusion if they are tradeable on the Hong Kong Stock Connect.
The index aims to capture opportunities across the battery value chain by using market intelligence insights from Wood Mackenzie to identify and classify companies according to four distinct categories: raw materials, manufacturing, enablers (correlated technologies and complementary solutions), and emerging technologies.
Each company is assigned an ‘Intensity Rating’ based on its perceived involvement across the value chain. Intensity Ratings are derived from the firm’s revenue exposure to 37 relevant sub-sectors, while the importance of each sub-sector to the value chain is also taken into account based on size, exposure, and growth. Each company is also assigned a ‘Composite Risk Score’ based on the firm’s exposure to quality and momentum factors.
Firms that fall in the bottom 20% when ranked by either Intensity Rating or Composite Risk score will be removed from the selection.
Each of the four categories is equally weighted and then adjusted to increase the weight of categories that contain sub-sectors with higher average Intensity Ratings. Within each category, stocks are weighted to favour firms with higher Intensity Ratings and Composite Risk Scores. Country exposure is capped at 25% (apart from the US which is capped at 50%) and individual stocks are capped at 3.5%.
Stocks from China (25.3%), the US (22.2%), and Japan (12.1%) presently hold the highest weight in the index, followed by Australia (5.8%) and Germany (5.1%). Materials (38.1%) and industrials (38.0%) each account for over a third of the index weight with lesser exposure to stocks from the information technology (14.7%) and utilities (4.1%) sectors.