ETFs Hydrogen ETF (ASX: HGEN) is an exchange-traded fund (ETF) that gives investors exposure to many of the world's leading companies involved with hydrogen. The focus is on businesses that offer pure exposure to hydrogen, rather than a diversified business.
Investors can get this exposure to the hydrogen industry from ETF Securities for an annual management fee of 0.69%.
Why is hydrogen good for the environment?
There are high hopes that hydrogen can prove to be a key enabler of decarbonisation.
It reportedly has three times more energy on a 'weight for weight' basis than petrol, while producing no carbon dioxide emissions.
The idea is that hydrogen can be used to replace fossil fuel in areas that have been difficult to decarbonise in the past.
There are plenty of businesses in the world looking to provide technology, products, services, or expertise in relation to hydrogen and helping the world transition to greener fuels.
What shares are in the ETFs Hydrogen ETF?
The Solactive Global Hydrogen ESG Index is made up of 30 hydrogen businesses around the world. That's the index that ETFs Hydrogen ETF seeks to track before expenses and so on.
Looking at the country allocation, these are the biggest five weightings at the end of November 2021: the US (32.6%), the UK (23.9%), South Korea (15.7%), Canada (9.3%) and Norway (6.8%).
At the latest disclosure, these are the biggest 10 positions: Plug Power, Bloom Energy, Ballard Power, ITM Power, Doosan Fuel Cell, Ceres Power, Fuelcell Energy, Linde, Air Products & Chemicals and Doosan Corp.
What do they do?
Let's look at what the largest five holdings do.
Plug Power – It is involved in building the 'green hydrogen' economy. It says it's the leading provider of clean hydrogen and zero-emission fuel cell solutions that are both cost-effective and reliable.
Bloom Energy – This business provides an onsite energy platform. It's based on proprietary solid oxide fuel cell technology. Its servers convert fuel into electricity through an electrochemical process without combustion at high efficiency. Bloom Energy says its platform provides multiple pathways for decarbonisation: hydrogen fuel cells, electrolysers, biogas, marine, and carbon capture.
Ballard Power – The company says that it's the leading global provider of innovative clean energy fuel cell solutions. Its products are aimed at different uses including buses, trucks, trains, propulsion for the marine industry and so on.
ITM Power – Next in the ETFs Hydrogen ETF is ITM Power, which manufactures integrated hydrogen energy solutions to enhance the utilisation of renewable energy that would otherwise be wasted.
Doosan Fuel Cell – It provides green, reliable and robust energy solutions. It says its technology is best suited for power plants, cold storages, large buildings, or spas as it generates 440KW electricity and heat together.
