Global Palladium Fund (GPF) has launched the world’s first physically-backed electric vehicles metals exchange-traded commodity (ETC).
The Global Palladium Fund Physical Electric Vehicle Metals ETC tracks the performance of the Solactive GPF Electric Vehicle index with a total expense ratio (TER) of 0.80%.
The ETC has listed on the Borsa Italiana with a seed capital of $10m. It will list on the London Stock Exchange, Deutsche Boerse and Six Swiss Exchange “in the coming weeks”.
Instead of holding equities to track the electric vehicle theme, the index will hold a basket of metals that create the four electric vehicle segments: battery, hybrid, plug-in hybrid and fuel cell, with metal weights capped at 40%.
Currently, the basket holds 40% copper, 28.1% palladium, 18.7% nickel, 11.5% cobalt and 1.8% platinum. The metals are stored in London Metal Exchange warehouses in Rotterdam and vaults in London and Switzerland.
The index will be rebalanced in July and could include additional metals subject to use and availability.
GPF said the ETC offers investors a diversified risk and return profile “compared to traditional equity-based investments”.
Alexander Stoyanov, CEO of GPF, said: “The growth in consumer appetite for electric vehicles in recent years has been phenomenal, and we are just at the start of this megatrend to replace the internal combustion engine.
“When approaching this theme, it can be hard for investors to know which equities to select, particularly when valuations are stretched and it is unclear which technologies or companies will be the winners.
Timothy Harvey, head of business development at GPF, added: “Exposure to the metals will help investors to hedge price risk as competition for access to key raw materials gathers pace.”