WisdomTree has launched a new thematic equity ETF in Europe targeting companies driving transformation within the automotive and mobility industry.
The ETF captures four megatrends shaping the automotive and mobility industry: connectivity, autonomous driving, shared mobility, and electrification.
The WisdomTree Global Automotive Innovators UCITS ETF has been listed on London Stock Exchange in US dollars (WCAR LN) and pound sterling (CARS LN) as well as on Deutsche Börse Xetra (WTGA GY) and Borsa Italiana (WCAR IM) in euros.
WisdomTree notes that rapid innovation in transportation promises not only cutting-edge solutions to the world’s evolving mobility needs but also the decarbonization of a sector that accounts for around 12% of greenhouse gas emissions.
Christopher Gannatti, Global Head of Research, WisdomTree, said: “The automotive and mobility industry is moving from a traditional ecosystem to an extended multimodal ecosystem leveraging new technologies and attempting to decarbonize transportation services. This will be a driving force for further investments which will ultimately transform the industry.”
Methodology
The fund is linked to the proprietary WisdomTree Berylls LeanVal Global Automotive Innovators Index which was developed in partnership with Berylls Strategy Advisors and LeanVal Research.
The index harnesses Berylls’ ten years of experience researching the automotive and mobility industry to identify relevant companies across the segment’s value chain. According to WisdomTree, the identification process captures four megatrends shaping the automotive and mobility industry: connectivity, autonomous driving, shared mobility, and electrification.
Eligible firms must derive at least 50% of their revenue from qualifying activities and, based on Beryll’s research, each eligible company is assigned a “Focus Score” which quantifies its overall exposure to the underlying automotive and mobility theme.
The methodology then utilizes LeanVal’s fundamental research capabilities to evaluate stocks based on financial strength, ensuring the index is robust both in terms of industry focus and financial performance. Each eligible company is assigned a “Fundamental Score” which is an aggregation of five equally weighted factor scores related to value, quality, stability, growth, and momentum risk premia.
The top 100 companies are selected for inclusion based on their combined Focus and Fundamental Scores. Constituents are weighted by float-adjusted market capitalization, and the index is rebalanced on a semi-annual basis in March and September.
Alexis Marinof, Head of Europe, WisdomTree, said: “Partnering with industry experts Berylls and LeanVal has allowed us to develop an index that provides a holistic view of the existing automotive industry as well as the global future mobility industry. This launch reinforces our commitment to delivering differentiated and purer thematic exposures than can be found elsewhere in an ETF wrapper.”
As of 27 September, a little more than one-third (36.5%) of the index was dedicated to US-listed stocks with the next-largest country exposures being Japan (22.9%), Germany (9.2%), China (8.0%), and South Korea (4.1%).
Companies classified within the automobiles & components sub-industry accounted for nearly two-thirds (60.2%) of the total weight followed by retailing (16.2%) and capital goods (12.6%).
The index was well diversified at the stock level with the largest constituent being Tesla at 3.2%.
The ETF comes with an expense ratio of 0.45%.