WisdomTree Launches a Thematic ETF Powering the renewable energy revolution

WisdomTree, a global financial innovator, has today added the WisdomTree Renewable Energy UCITS ETF (WRNW) to its range of thematic exchange-traded funds (ETFs). WRNW, an Article 9 fund under SFDR, seeks to track the price and yield performance, before fees and expenses, of the WisdomTree Renewable Energy Index (the ‘Index’) and has a total expense ratio of 0.45%. WRNW, is listed today on Börse Xetra and Borsa Italiana, and will list on the London Stock Exchange on 13 June 2023.

The Index is designed to track the performance of global companies involved in the renewable energy value chain as part of the electrification and decarbonization megatrend and that meet WisdomTree’s ESG (environmental, social, and governance) criteria. Aligning with WisdomTree’s approach to building thematic ETFs that provide pure and differentiated exposures, WisdomTree has partnered with Wood Mackenzie, a leading energy transition research and consulting firm. The stock selection of the index is informed and driven by market intelligence from Wood Mackenzie.

The world faces a significant challenge to adhere to the Paris Agreement and limit global warming to 1.5 degrees Celsius this century. To achieve this target, multiple decarbonization solutions will need to be adopted over the next few decades, with renewable energy sources expected to play a key role in the energy transition.

The Index tracked by the WisdomTree Renewable Energy UCITS ETF was designed to evolve with rapidly developing technology and the decarbonization solutions being leveraged to achieve net zero emissions by 2050. To be eligible for inclusion in the Index, a security must be involved in one or more of the following parts of the value chain:

• Enablers: The building blocks of effectively operating a renewable energy grid including battery energy storage systems, network operators, and recycling. 
• Raw materials: Suppliers of key commodities like steel, copper, and aluminum.
• Manufacturing: Manufacturers of modules such as polysilicon for solar panels, blades and towers for wind turbines, and high voltage cables for power transmission networks.  
• Application: Companies generating renewable power and developing new projects to add additional capacity.
• Emerging technologies: Innovators of new renewable energy technologies like floating wind and solar, solid-state batteries, and hydrogen electrolyzers.

According to Wood Mackenzie’s 1.5-degree scenario, electrification and renewables underpin the reduction in CO2 emissions. The 1.5 scenario requires an estimated $60tn of capital expenditure by 2050, with electrification requirements, utilizing solar and wind, driving investment flows. Emerging technologies, including carbon capture and storage and hydrogen at the industrial scale, will become critical for decarbonizing hard-to-abate sectors as the transition evolves. 

“The transition towards cleaner and more sustainable energy sources is our best chance of tackling climate change. Renewable energy is at the heart of this endeavour and we see several key drivers that could propel the growth in renewable energy usage. Since the war in Ukraine, energy security has been a priority for countries as it became clear the world had to reduce their dependence on fossil fuels. This, coupled with regulatory support to meet net zero targets by 2050 and significant cost reductions in wind and solar power production are creating a perfect storm for renewable and clean energy production.”

Chris Gannatti, Global Head of Research, WisdomTree.

The launch of WRNW expands WisdomTree’s partnership with Wood Mackenzie and is the fourth ETP WisdomTree has launched leveraging Wood Mackenzie’s market intelligence and expertise. The first, the multi-award-winning WisdomTree Battery Solutions UCITS ETF (VOLT) launched in 2020, followed by WisdomTree Energy Transition Metals (WENT) and WisdomTree Battery Metals (WATT) in April 2022. WENT and WATT began providing investors with access to Cobalt and Lithium, in April 2023 when the two metals were added to the exchange-traded products.

 “Expert partnerships are at the heart of our thematic offering. Our approach has resonated with investors since the range launched in 2018 and has culminated in a multi-award-winning suite of ETFs with $1.25bn in assets under management. Investors know that a WisdomTree thematic ETF will deliver the promised exposure in a focused way that differentiates from broad benchmarks and other thematic products.  By leveraging best-in-class industry experts, like Wood Mackenzie, we are able to offer a pure exposure that reflects a given theme today and evolves as the theme does.”

Alexis Marinof, Head of Europe, WisdomTree.

WRNW is WisdomTree’s tenth thematic equity ETF and the latest addition to a suite of eight WisdomTree ETPs providing investors access to the energy transition. The prior launches in WisdomTree’s energy transition range are WisdomTree California Carbon (WCCA), WisdomTree Carbon (CARB), WisdomTree Recycling Decarbonisation UCITS ETF (WRCY), WisdomTree Battery Solutions UCITS ETF (VOLT), WisdomTree Global Automotive Innovators UCITS ETF (WCAR), WisdomTree Energy Transition Metals (WENT) and WisdomTree Battery Metals (WATT).