Want to buy ASX shares in hydrogen? Here's how

Can hydrogen replace fossil fuels in the future? Here's a way to invest in a whole bunch of companies involved in this developing industry.

| More on:
A young boy standing in a grassy field surrounded by trees holding a world globe over his head.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Along with electric vehicles, hydrogen fuel is touted by many experts and manufacturers as the next big solution to help us move beyond environmentally destructive petrol.

But as an ASX shares investor, how do you identify which companies are involved in the hydrogen industry?

Fortunately, this week ETF Securities will provide an easy answer to that question.

The fund provider's latest product, ETFS Hydrogen ETF (ASX: HGEN), will commence trading on the ASX on Thursday.

According to the company, the portfolio will comprise 30 stocks from the developed world with "a heavy exposure" to hydrogen.

ETF Securities has not revealed the specific stocks at the time of writing.

Is this like the internet in the 1990s?

ETF Securities head of distribution Kanish Chugh said that the "hydrogen economy" is still in an early stage.

"However, its potential applications are limitless – from making fertiliser to powering the world's transport systems."

He equated the current state of the hydrogen industry to the internet in the 1990s or semiconductors in the 1970s.

"In these instances, disruptive technologies reached tipping points and saw exponential uptake. Their uptake was driven by megatrends – which are one-off structural shifts in the economy and society."

ETF Securities' hydrogen ETF is understood to be the first exchange-traded fund on the ASX that solely focuses on hydrogen.

There are several of these funds already trading in overseas share markets.

Governments are subsidising hydrogen

To encourage cleaner fuels, governments around the globe are subsidising the development of hydrogen products, according to ETF Securities.

"Much of the current technology in the hydrogen industry is based around fossil fuel-based hydrogen," the fund provider stated.

"However, new technology threatens to disrupt this old market, promising to bring the costs of green hydrogen down and production volumes up."

While many mining companies are involved in extracting hydrogen, the new ETF reportedly will not invest in stocks that don't meet ESG criteria.

"An ESG filter, using data from Minerva Analytics, [that] excludes companies involved in controversial weapons, small arms, gambling, tobacco and fossil fuels, or which are non-compliant with the United Nations Global Compact."

"The fund also removes oil, gas and coal companies."

Motley Fool contributor Tony Yoo has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on ETFs

Man holding fifty Australian Dollar banknote in his hands, symbolising dividends, symbolising dividends.
ETFs

Does Vanguard Australian Shares Index ETF (VAS) pay fully franked dividends?

Are VAS ETF investors getting the full benefits of franking credits?

Read more »

The silhouettes of ten people holding hands with their arms raised against the sky, as the sun rises or sets in the background.
ETFs

Record highs! Is it too late to buy the Nasdaq 100 (NDQ) ETF on the ASX?

AI mania is taking the tech-centric index to new heights. Should investors hold off on buying into the local Nasdaq…

Read more »

ETF written in blue with a man and woman sitting on their laptops.
ETFs

5 ASX ETFs that could be great long term buys

Looking for buy and hold options? Then take a look at these five ETFs.

Read more »

A white and black robot in the form of a human being stands in front of a green graphic holding a laptop and discussing robotics and automation ASX shares
Technology Shares

Joining the revolution: How I'd invest in ASX AI shares right now

Advances in artificial intelligence (AI) could usher in a new industrial revolution. Here’s how you can invest in it.

Read more »

A middle-aged couple dance in the street to celebrate their ASX share gains
ETFs

Why Vanguard US Total Market Shares Index ETF (VTS) is a top buy for retirement

Cash flow and capital growth are two reasons why I think this ASX ETF could be a really good pick…

Read more »

Diverse group of university students smiling and using laptops
ETFs

Own the ASX's Vanguard US Total Markets ETF (VTS)? Here's what you're invested in

This ETF is worth a deeper dive...

Read more »

ETF with different images around it on top of a tablet.
ETFs

Buy and hold these ASX ETFs for 10 years

Here's why these ETFs could help you generate wealth over the long term.

Read more »

ETF in written in different colours with different colour arrows pointing to it.
ETFs

4 ASX ETFs with yields over 5%

Here are four funds offering pleasing levels of income.

Read more »