Industry Updates

WisdomTree adds lithium and cobalt to energy transition ETCs

Low electric vehicle demand in China weighs on global metal prices

Theo Andrew

a white car with a red light

WisdomTree is set to add lithium and cobalt to two exchange-traded commodities (ETCs) after trading volumes of both metals increased.

The WisdomTree Battery Metals ETC (WATT) and the WisdomTree Energy Transition Metals ETC (WENT) will see the two metals added to the basket of commodities.

Cobalt and lithium will be weighted 2.5% and 0.5% in both ETCs, respectively.

The two synthetic ETPs are self-indexing, tracking the WisdomTree Battery Metals Commodity index and the WisdomTree Energy Transition Metals Commodity index.

In addition to increasing the commodity baskets, the asset manager said it would be amending the total return rate index calculation for the two ETCs, using the Fed funds effective rate rather than the 13-week high auction rate for US Treasury Bills.

It comes as the price of lithium has nose-dived over the past year, down 61.6% in the past 12 months, as at 2 May, following a slump in demand for electric vehicles in China.

Prices have been falling since late last year but dropped sharply last month as traditional car makers cut prices, eating into the electric vehicle space’s market share.

The supply side has also helped push prices down, with a fresh wave of inventory expected to come online from China, Australia and Chile.

Cobalt has also seen steep declines, hitting a 32-month low in March, following a similar trend.

The low demand from China has hit global metal prices globally, with WATT returning -28.9% and WENT returning -18.9% over the past year. 

The two ETCs launched in April last year, with WENT collecting $96m assets under management (AUM) versus $2.1m for WATT.

Featured in this article

Logo for WisdomTree