Nornickel's global palladium fund launches world's first physically-backed electric vehicle metals ETC
MOSCOW. Feb 1 (Interfax) - Global Palladium Fund, a metals distributor founded by Nornickel , has launched the GPF Physical Electric Vehicle Metals Exchange Traded Commodity (ETC), Nornickel said in a press release.
The ETC is being launched with $10 million of seed capital, and listing initially on Borsa Italiana. Listings on Deutsche Borse, London Stock Exchange and SIX will be announced in the coming weeks. It will have a Total Expense Ratio (TER) of 0.80%.
"Metals are essential to the energy transition and critical materials for electric vehicles. This new ETC provides investors with a simple and cost-effective way of accessing these metals, bringing potential diversification and inflation-hedging benefits to portfolios," Nornickel said.
The ETC is backed by physical metal and will track the performance of the Solactive GPF Electric Vehicle Index. The bespoke index is made up of metals based on their use across four electric vehicle segments: battery (BEV), hybrid (HEV), plug-in hybrid (PHEV) and fuel cell (FCEV).
Metals weights (capped at a maximum of 40%) in the index basket are: Copper (40%), Palladium (28.13%), Nickel (18.65%), Cobalt (11.45%), and Platinum (1.77%), with metals stored in LME warehouses in Rotterdam and LPPM vaults in London and Switzerland. The index will be rebalanced annually in July to reflect evolving use of metals across the different segments, and includes the scope to introduce additional metals, subject to use and availability.
"We are excited to offer investors a basket of metals with electric vehicles focus, including cobalt, copper and nickel for the first time ever. We believe that this digital instrument is a great way for investors to access the commodities essential for the global decarburization process and hence enjoying rising demand today," said Anton Berlin, Nornickel Vice President, Sales and Distribution.
"The growth in consumer appetite for electric vehicles in recent years has been phenomenal, and we are just at the start of this mega trend to replace the internal combustion engine. When approaching this theme, it can be hard for investors to know which equities to select, particularly when valuations are stretched and it is unclear which technologies or companies will be the winners. GPF is providing investors with an innovative physically-backed solution that offers a different risk and return profile to equity investments," said Alexander Stoyanov, Global Palladium Fund CEO.