It's around 18 months since I purchased my first small hydrogen play - ITM Power after reading about a joint project with Orsted. I put together a few thoughts on the potential for hydrogen in this article from January 2020.
I guess many will know that almost any company involved in hydrogen had a stellar year in 2020 and I am hoping this will continue for many years to come. Last July the EU announced its plans for 40GW of renewable hydrogen by 2030. I will be interested to see what the plans are in the US under the new Biden administration but certainly hydrogen will play a big part in the transition.
Decarbonising the global economy as it moves away from oil & gas will mean a lot of electrolysers to make the green hydrogen and also a lot of solar and wind to provide the energy to make it work.
|Many Applications for Green Hydrogen|
That is why I have rejigged my portfolio into the companies working in these areas.
Clean hydrogen - Nel Hydrogen, McPhy, Ceres Power, ITM Power, Ballard Power, Plug Power, Orsted and Powercell.
Solar - Enphase, Sunrun and SolarEdge.
Wind - Orsted, Vestas Wind as well as my iShares Clean Energy ETF
The New Hydrogen Fund
Legal & General offer several thematic funds such as clean water and clean energy. I am pleased to see that they have now expanded the offering with a new ETF which focuses on the emerging new hydrogen economy - an area I have been looking at for the past year or so with my green portfolio.
The L&G Hydrogen Economy ETF (HTWO) and (HTWG) launched last week and is listed on all the main European exchanges including London. It has charges of 0.49%.
This is an index fund which will track the Solactive Hydrogen Economy Index (latest factsheet) which currently holds 28 companies from around the globe which derive a significant proportion of revenues from hydrogen. The areas covered include clean hydrogen producers, fuel cell technology, transport, industrial and utility companies and others in the hydrogen supply chain.
"At LGIM, we believe in giving investors targeted, specific exposure to the full value chain of low-carbon solutions across the power production, storage and distribution energy cycles. The launch of the L&G Hydrogen Economy UCITS ETF expands on our market-leading thematic range and underscores our commitment to equipping investors with the portfolio tools they need to gain access to the key themes that will help us transition to a more sustainable world".
James Crossley, Head of UK Retail Sales at LGIM
Naturally most of my hydrogen holdings are included but I will be adding this new fund to my green portfolio in the coming week as a benchmark. Obviously it offers a useful collective investment vehicle for those who want to add the emerging hydrogen focus to their portfolio.
18/2/21 Update - Shares purchased in my ISA this morning @ 707p ($9.75)
As ever, this article is merely a record of my personal investment decisions and should not be regarded as an endorsement or recommendation - always DYOR!