Industry Updates

HANetf to merge five thematic ETFs on low demand

TANN, ZERO and YODA will close following the mergers

Lauren Gibbons

a sunset behind windmills

HANetf is proposing to merge three thematic ETFs into two of its existing products, as the firm continues to restructure its fund range on low demand.

In a shareholder notice, the white label provider said two of its clean energy ETFs, the $7.1m Solar Energy UCITS ETF (TANN) and the $3.4m S&P Global Clean Energy Select HANzero UCITS ETF (ZERO) will merge into the iClima Global Decarbonisation Enablers UCITS ETF (CLMA).

In addition, the $11.5m Procure Space UCITS ETF (YODA) will merge into the recently launched Future of Defence UCITS ETF (NATO), which houses $45m assets under management (AUM).

Both mergers – subject to shareholder approval – will take place on 27 February and come after all the three ETFs struggled to accrue assets since their inception in June 2021.

HANetf cut the fees on ZERO and TANN in June last year in a bid to boost AUM.

“Since its inception in June 2021, the merging fund has failed to gather assets. The total expense ratio of the merging fund was reduced in the interim in an effort to incentivise investors,” the group said. “However, the merging fund did not gather sufficient additional assets and an improvement is not expected in the short to medium term. Hence, it is no longer viable to maintain.”

Also due to low AUM, HANetf closed five ETFs last year, which included the FMQQ Next Frontier Internet & Ecommerce ESG-S UCITS ETF (FMQQ).

HANetf added the decision to merge TANN and ZERO into CLMA is reinforced by CLMA's 'dark green' sustainability status, classified as Article 9 under the Sustainable Finance Disclosure Regulation (SFDR). This is a higher sustainability rating compared to TANN and ZERO, which both hold an Article 8 classification.

CLMA was launched in December 2020 and currently has $24.6m AUM.

The ETF recorded a 3.64% return in 2023, while TANN and ZERO faced downturns with returns of -18.76% and -12.81%, respectively.

Tracking the iClima Global Decarbonisation Enabler index, CLMA offers exposure to companies that offer products and services that enable CO2e avoidance solutions and quantifying the impact.

Meanwhile, the group believes NATO is well placed amid current the unstable geopolitical landscape, as western countries dramatically increase their defence spending in the face of the war in Ukraine and building tensions between China and Taiwan.

Launched in June 2023, NATO’s was one of three rollouts from the firm over the last year, including the HANetf European Green Deal ETF (EUGD), the Sprott Energy Transition Materials UCITS ETF (SETM) and the INQQ India Internet & Ecommerce ESG-S UCITS ETF (INQQ).

Last September, the firm also agreed a deal with Legal and General Investment Management (LGIM) to merge the $37m L&G US Energy Infrastructure MLP UCITS ETF (MLPX) with the $19.5m Alerian Midstream Energy Dividend UCITS ETF (MMLP).

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