Lithium battery technology is essential to the rise of electric vehicles (EVs), renewable energy storage, and mobile devices.
Advancing Clean Technologies
EVs produce zero direct emissions, meaning broader adoption could result in reduced greenhouse gas emissions and improved urban air quality.1
ACDC invests in companies throughout the lithium cycle, including mining, refinement and battery production, cutting across the traditional sector and geographic definitions.
1 US Office of Energy Efficiency & Renewable Energy, Jan 2020
Product Information As of 1 Dec 2023
30 Aug 2018
Management Costs (% p.a.)
Managed Investment Scheme
NAV Information As of 1 Dec 2023
The Global X Battery Tech & Lithium ETF (ACDC) offers investors exposure to global companies developing electro-chemical storage technology and mining companies producing battery-grade lithium.
The Global X Battery Tech & Lithium ETF (ACDC) seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of the Solactive Battery Value-Chain Index.
ACDC AU Equity
10:00AM – 4:00PM
Management & Administration
Global X Management (AUS) Limited
The Hongkong and Shanghai Banking Corporation Limited, Sydney Branch
Batteries are a growth area as they are essential for storing clean energy. As the world transitions away from fossil fuels and towards solar, wind and hydro power, the demand for batteries is forecast to increase.
Batteries are also crucial for electric cars, which are expected to steadily displace internal combustion engine cars over the coming decades.
Outside of clean energy, batteries are required for mobile devices such as phones and laptops, which are being purchased in ever-greater number.
Lithium is the crucial element supporting batteries, as lithium-ion batteries are cheaper to produce, faster to recharge and longer lasting than alternatives.
Is ACDC a sustainable or environmental investment?
Batteries are essential for supporting renewable energy and the transition away from fossil fuels. Recognising this, state and Commonwealth governments have introduced subsidies and programmes designed at boosting the uptake of batteries and electric cars.
Examples include South Australia’s Hornsdale Power Reserve, Queensland’s battery manufacturing precinct, the Commonwealth government exempting electric vehicles from fringe benefits and import taxes.
ACDC also includes an environmental, social and governance (ESG) screen aimed at severely restricting the ability of fossil fuel companies to be included in the index. The index prevents companies that make more than 25% of their revenue in oil or gas, or more than 30% of their revenue from thermal coal, being included in the index.
How is the ESG screen built and what are its limitations?
The index provider, Frankfurt-based Solactive AG, uses ESG data sourced from Minerva Analytics, an ESG research and data company based in the UK. Minerva conducts proprietary research on companies’ sustainability and governance activities to build data sets. Minerva’s datasets are used by Solactive to determine the final constituents in the index.
The strength of this data-driven approach to ESG is that it can be incorporated into an index, allowing for potentially lower-cost passive management. Limitations and risks of this approach include a lack of direct stewardship and potential for data errors.
How are the companies in the index identified?
The index universe for energy storage technology providers is comprised of projects identified from the Clean Horizon’s Energy Storage Source, classified as electrochemical, having an energy capacity of at least 1 MWh and identified as an energy storage technology manufacturer. The companies must also have a primary listing on an eligible exchange – if a subsidiary, then the parent company will be identified as part of the universe instead.
The index universe for mining companies is taken from Fastmarkets' Metal Bulletin, including all companies producing battery grade lithium, with their primary listing on an eligible exchange.
To be included in the index, companies must have a free-float capitalisation of at least US$200m (lower for existing constituents), have a minimum three-month daily trading average of US$1m, and not be classified by FactSet as an “Energy” company.
How are companies in ACDC weighted?
Companies in ACDC are equally weighted, meaning each holding makes up the same portion of the portfolio at each semi-annual rebalance and therefore contribute equally to overall performance.
The choice of an equal weighting scheme provides investors exposure to the overall sector without a bias towards large-cap stocks, which tend to dominate where holdings are weighted by market capitalisation.
Why use ACDC for exposure to battery technology?
The value chain for battery technology ranges from mining companies to manufacturers of battery storage and storage technology providers. It is a diverse range of industries spanning the globe and ETFs like ACDC can assist investors in obtaining diversified exposure to newer technologies as well as more established companies. In fast-moving and emerging industries, it can be hard to pick the individual winners, so investing in an ETF like ACDC allows investors to access the potential growth across the battery technology megatrend.
How can you use ACDC in a portfolio?
ACDC can be used as a tactical tilt towards emerging technologies in the industrials and materials sector.
As a thematic tilt towards megatrends, including the trend towards renewable energy and electric vehicles.
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