The new instrument gives investors a balanced opportunity to cash in on metals in demand on the fast-growing electric car market, Anton Berlin, Nornickel’s vice president for sales and distribution, said.
“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,” he added.
Global Palladium Fund CEO Alexander Stoyanov noted that the “mega trend” to replace the internal combustion engine with the electric one is just in the beginning, and the new ETC offers investors an alternative to high-risk equities, as it is still uncertain which companies will rule the new market.
First listed on Borsa Italiana, the contract will also be available at Deutsche Börse, London Stock Exchange and SIX in a few weeks, Nornickel said.
The metals backing the ETC are stored at LME warehouses in Rotterdam and LPPM vaults in London and Switzerland, the company said.
Initial weight of metals in the basket will be 40% for copper, 28.13% for palladium, 18.65% for nickel, 11.45% for cobalt, and 1.77% for platinum. It will be annually revised in July to reflect evolving use of metals across the different segments, with a possibility to introduce additional metals subject to use and availability.
The new ETC tracks the performance of the Solactive GPF Electric Vehicle Index, which 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).
Last year, the Global Palladium Fund launched physically backed palladium, platinum, gold, silver, copper, nickel, and carbon neutral nickel ETCs.