WisdomTree launches car themed ETF
WisdomTree has launched its ninth thematic ETF in Europe, this time targeting for self-driving and electric cars.
The WisdomTree Global Automotive Innovators UCITS ETF (WCAR), which is launching on exchanges across Europe, tracks the Berylls LeanVal Global Automotive Innovators Index.
To qualify for the index, companies must derive 50% of their revenue from the car industry and meet de minimis size and liquidity requirements. Companies involved in the targeted theme - electric vehicles, self-driving cars – get higher thematic scores.
Eligible companies are then scored on value, quality, stability, growth and momentum. Companies with the top 100 combined thematic and factor scores get included in the index and market cap weighted.
The index has been built with help from Berylls Strategy Advisors and LeanVal Research. Beryll’s is a German car consultant, which provides the expertise on the car industry. LeanVal is a German financial services research firm, which provides the fundamentals analyses of car companies.
The fund charges 0.45%. The top 10 holdings are below.
|
Name |
Ticker |
Country Code |
Weight |
|
1. Tesla Inc |
TSLA UQ |
US |
3.37% |
|
2. O'Reilly Automotive Inc |
ORLY US |
US |
3.24% |
|
3. AutoZone Inc |
AZO UN |
US |
2.98% |
|
4. Paccar Inc |
PCAR UQ |
US |
2.89% |
|
5. Cummins Inc |
CMI UN |
US |
2.85% |
|
6. Honda Motor Co Ltd |
7267 JT |
JP |
2.82% |
|
7. Ferrari NV |
RACE IM |
IT |
2.79% |
|
8. General Motors Co |
GM UN |
US |
2.71% |
|
9. Ford Motor Co |
F UN |
US |
2.63% |
|
10. Contemporary Amperex Techn-A |
300750 C2 |
CN |
2.55% |
Bernie’s commentary – WisdomTree finds a consultant
I have few thoughts on this launch, in order of most negative to most positive:
- I’m noticing that the big American index shops – S&P, MSCI, FTSE Russell – are making little headways into thematic ETFs. I don’t know if these companies use “net new business” as a KPI, but if they do I’m not sure they’d be doing too well. I suspect the reason may have something to do with fees. As the global ETF fee war drives down management fees across the board, ETF providers are guarding their margins more closely. As such there seems to be a broad migration away from the big three index shops, especially among the smaller and medium sized ETF providers.
- There’s ETFs for every sector, theme and niche. Yet there’s never really been a conventional car ETF, which did the obvious thing and just target the car industry on a market weighted basis. It’s not for a lack of pureplays: there’s plenty of listed car companies. I suspect the reason for this gap in the market is that car companies have performed poorly for decades, with some becoming the playthings of private equity firms.
- WisdomTree Europe has a talent for pulling specialised and niche consulting firms out of a hat. For their battery metals ETF they found Wood Mackenzie. For cloud computing they picked up Bessemer Venture Partners. For cybersecurity, they got Team8. And so on. I suppose WisdomTree thinks bringing on consulting firms’ can lend credibility to their thematic indexes. Maybe that's why they put the effort into hunting down these consultants. And maybe they're right.
