VanEck Hydrogen Economy UCITS ETF

  • Fast-growing industry
  • Governments around the world are turning towards supporting a clean energy future
  • Tracks highly liquid hydrogen companies, based on market capitalization and trading volume
  • Disrupting the traditional energy industry

ETF Details

ETF Details

Basis-Ticker: HDRO
ISIN: IE00BMDH1538
TER: 0.55%
AUM: $74.9 M (as of 21-06-2024)
SFDR Classification: Article 9

Lower risk

Typically lower reward

Higher risk

Typically higher reward
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Risk: You may lose money up to the total loss of your investment due to Emerging Markets Risk and Risk of investing in smaller companies as described in the Main Risk Factors, KID and prospectus.

Hydrogen Stocks Have Momentum

A huge expansion is expected of the hydrogen industry, leading to considerable expansion of these stocks. Decarbonizing energy and other industries globally using hydrogen will require investment of almost $15 trillion between now and 2050, according to a recent Energy Transitions Commission report.1
So-called green hydrogen2, made from water by using renewable energy to power electrolysers, is currently too expensive for widespread use, but as demand grows so the cost should fall.
Around 85% of the required investment would be in renewable energy generation, with 15% in electrolysers, hydrogen production facilities and transport and storage infrastructure.3


1 Making the Hydrogen Economy Possible: Accelerating Clean Hydrogen in an Electrified Economy. April 2021.
https://energy-transitions.org/wp-content/uploads/2021/04/ETC-Global-Hydrogen-Report.pdf

3 Making the Hydrogen Economy Possible: Accelerating Clean Hydrogen in an Electrified Economy. April 2021.
https://energy-transitions.org/wp-content/uploads/2021/04/ETC-Global-Hydrogen-Report.pdf

Types of Hydrogen Stocks

The hydrogen economy comprises a range of types of companies that VanEck classifies as: pure-play hydrogen stocks, hydrogen gas producers, fuel cell producers, hydrogen storage and electrolyser producers.

Volatility

The performance of some has been volatile in the short-term: they have risen quickly at times when ‘green’ stocks have been in favor, only to correct when the prospect of rising global interest rates has dampened enthusiasm for so-called long duration stocks.

Yet, over the longer term, many hydrogen stocks should be a play on the growth of the companies they represent.

Risks

Because of the relatively newness of hydrogen technology, many regard hydrogen stocks as having a relatively high risk.

Diversified Investing

You can reduce the investment risk by buying a Hydrogen ETF rather than buying a handful of individual hydrogen stocks. A Hydrogen ETF gives exposure to a broad set of these stocks. It is rebalanced regularly, to avoid over exposure to a hydrogen stock that has become over-valued, or under exposure to a hydrogen stock that has become under-valued. The VanEck Hydrogen ETF offers a low-cost, diversified way to back the expansion of the hydrogen economy.

Main Risk Factors of Hydrogen Stocks

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This occurs when it is difficult to buy or sell a specific financial instrument. If the relevant market is illiquid, it may be impossible to make a transaction or liquidate a position at an advantageous or moderate price, or at all.

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The fund may invest a high percentage of its assets in a smaller amount of issuers or may invest a greater proportion of its assets in a single issuer. Consequently, gains and losses on a single investment may have a larger influence on the Fund's Net Asset Value and may increase the volatility of the Fund compared to more diversified funds.

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The securities of smaller companies may be more volatile and less liquid than the securities of large companies. In comparison with larger companies, smaller companies, may have a shorter history of operations, fewer financial resources, less strength to compete, a less diversified product line and a smaller trading market for their securities. It may also be more susceptive to market pressure. This is one of the risk factors of hydrogen stocks.

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