A Hyundai Ioniq battery electric vehicle charges at a Motor Fuel Group EV Power forecourt on April 21 2022 in Manchester, England
The ETF holds globally listed companies involved in the entire future mobility ecosystem © Getty Images

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US-based asset manager Krane Funds Advisors has rolled out an exchange traded fund in Europe that invests in the “multi-decade global megatrend” of electric vehicles, and the future of transportation and mobility.

The new KraneShares Electric Vehicles & Future Mobility ESG Screened Ucits ETF, which has been listed on the London Stock Exchange, tracks the Bloomberg Electric Vehicles ESG-Screened Index.

Anthony Sassine, senior investment strategist at New York-headquartered KraneShares, said the ETF holds globally listed companies involved in the entire future mobility ecosystem, including electric vehicle production, autonomous driving, shared mobility, lithium and copper production, lithium-ion batteries, hydrogen fuel cell manufacturing and electric infrastructure.

A US-domiciled version of the KraneShares strategy (KARS), which started trading in New York in early 2018, manages some $240mn in assets.

This article was previously published by Ignites Europe, a title owned by the FT Group.

Xiaolin Chen, head of international at KraneShares, which is famous for its China-focused funds, said “global electric vehicle adoption will be a multi-decade secular investment opportunity”, adding that the new Ucits ETF “provides diversified geographic exposure to the world’s electric vehicle leaders, including China, Europe and the US”.

KraneShares CEO Jonathan Krane said the ETF provided “pure exposure” to this global megatrend with an overlap of less than 3 per cent to the MSCI ACWI index.

The new Ucits ETF has a total annual fund operating expense of 0.72 per cent.

KraneShares, which is majority owned by Chinese investment bank China International Capital Corporation, said the global electric vehicle market was projected to reach $2.7tn of total investments by 2040, while autonomous vehicles and the associated “passenger economy” were expected to generate cumulative global revenues of $8tn by 2050.

Other asset managers that offer Europe-domiciled ETFs focused on electric vehicles and future mobility are BlackRock’s iShares arm, DWS and Global X.

The product is classified under article eight of the EU’s Sustainable Financial Disclosure Regulation, meaning it must promote sustainable or environmental characteristics and can invest in sustainable assets but does not have sustainable investing as a core objective.

*Ignites Europe is a news service published by FT Specialist for professionals working in the asset management industry. It covers everything from new product launches to regulations and industry trends. Trials and subscriptions are available at igniteseurope.com.

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