Hydrogen could be one of the next big investment themes in 2021, says a top ETF manager.
Its potential to take the clean energy industry by storm led Global X ETFs to launch its Hydrogen ETF (HYDR) in mid-July, said Jay Jacobs, senior vice president and head of research and strategy for the company, versus CNBC’s “ETF Edge” this week.
“To go back a bit in history, we launched a lithium and battery tech ETF 11 years ago last week,” Jacobs said in a Monday interview. “Over the course of 11 years, electric vehicles have grown from around 0% of the global auto industry to around 3% of the global auto industry.”
The trajectory of hydrogen over the next few decades could look very similar, Jacobs said.
“We believe the next long-term trend will be the switch to hydrogen, which doesn’t necessarily replace lithium batteries, just a new form of clean energy that can power trucks, trains and boats,” he said.
Although Tesla CEO Elon Musk was known to write off hydrogen as “insanely stupid” in 2019, there are many use cases in heavy industry, Jacobs said.
For example, while it doesn’t make sense to have a fuel cell powered car, fuel cells could reduce the weight load on trucks because they are significantly lighter than batteries, he said.
“From a purely efficiency perspective, heavy transport prefers hydrogen. In addition, you see a lot more solar energy, you see a lot more wind that is fed into the grid and temporarily generates electricity,” he said.
“Hydrogen is actually a very efficient way of storing excess electricity when it is not needed. You can put that hydrogen in a truck, you can ship it to another country that might want it, but it’s a very efficient form of battery for excess renewable electricity. “
Clean living could be one of the top topics of 2021 alongside clean energy, said Christian Magoon, founder and CEO of Amplify ETFs, in the same “ETF Edge” interview.
Amplify has seen keen interest in its recently launched Cleaner Living ETF (DTOX), especially from those also interested in ESG or environmental, social and governance-based investments, Magoon said.
The company is also preparing to launch a digital and online trading ETF holding Coinbase, Charles Schwab and Robinhood, the CEO said.
“This digital assets marketplace, an app-friendly and mobile-friendly online trading marketplace, is in our opinion a fast growing area within financial services that is really benefiting from the global trend for investors to trade stocks, bonds, commodities and cryptocurrencies, digital assets and which will be introduced here in September, “he said.
Disclaimer of Liability