Fuel of the future - hydrogen
In recent years, electric cars have stormed onto Danish roads. But we may also have to get used to seeing more cars running on hydrogen in the future. But what is the advantage of hydrogen as an energy source compared to electricity and fossil fuels? This article gives you an insight into how you as an investor can invest in hydrogen.
In recent years, electric cars have stormed onto Danish roads. But we may also have to get used to seeing more cars running on hydrogen in the future. But what is the advantage of hydrogen as an energy source compared to electricity and fossil fuels? This article gives you an insight into how you as an investor can invest in hydrogen. The article contains affiliate links.
What is hydrogen?
Hydrogen is the first element in the periodic table and the solution to many of the problems that currently limit the deployment of green energy. Hydrogen can be made from either fossil fuels or renewable energy sources - the latter are called green hydrogen.
Through electrolysis, electricity can be converted into hydrogen, which is much easier to store and transport.
In recent years, electric cars have taken to the roads in Denmark. But we may also have to get used to seeing more cars running on hydrogen in the future. But what is the advantage of hydrogen as an energy source compared to electricity and fossil fuels?
Hydrogen can be seen as the best of both worlds. Cars that run on hydrogen emit no pollutants, only water. At the same time, you are not limited by long charging times like with electric cars, as hydrogen cars can be refuelled just like normal cars.
How can hydrogen be used?
Hydrogen is already being used in several areas - but it is far from being as widespread as it is hoped to become in the future. Today, for example, hydrogen cars are available from Hyundai and Toyota, but sales figures are relatively limited. However, many car manufacturers are now exploring the possibility of producing hydrogen cars.
However, it is hoped that hydrogen will become much more widely used in the next few years. There are several reasons for this. First, the technology behind hydrogen production will become both cheaper and more efficient. In addition, the need to smooth out the fluctuations in electricity generation will increase as the transition to green energy takes place, which hydrogen can help with.
Investment bank Barclays expects up to 10% of cars and 35% of trucks by 2050 will run on hydrogen. So hydrogen is expected to become relatively widespread. In addition to passenger cars, hydrogen could also be used in contexts such as ferries or aircraft.
Several countries and companies are currently investing large amounts of money in developing and deploying hydrogen as a fuel, including Denmark. For example, researchers are working on the EEEHy project, which aims to reduce energy loss and yield 99 percent of energy, as well as increase hydrogen production by as much as 400 percent compared to existing commercial technology.
Germany has also invested heavily in hydrogen. In total, the state has invested over 5.2 billion euros in research projects involving hydrogen. In doing so, it aims to become the "Hydrogen Republic of Germany" and has already set aside a further €52 billion for future investment.
Several others have also invested large sums of money in the industry, so it is safe to assume that this will help to speed things up so that we soon see more hydrogen cars on the roads.
Follow the development of hydrogen through a tracker certificate
A certificate is a security that tracks an underlying asset - such as a an equity index. Many certificates are leveraged, but not all of them l. The benefits of buying a certificate are similar to those of funds or ETFs; you can easily achieve a larger diversification, and at the same time you don't have to pick one or more individual stocks.
If you are interested in gaining exposure to hydrogen through a certificate, Vontobel offers the following certificate:
The certificate follows the index "Solactive Hydrogen Top Selection Index (NTR)". You can see the development of the index here:
Note: Performance is not a reliable indicator of future results.
The index currently includes 15 shares (as of 23 May 2021) selected by Solactive. You can see below shares in the index and what their weight is.
Certificates from Vontobel
The certificate is "open end", which means that no expiry date has been set. In addition, it is worth noting that, unlike many others, the certificate is not leveraged. The management fee of the certificate is 1.2% per annum. In addition, you are paying a spread when buying the product.
You can view the certificate here , including the documentation consisting of final terms and base prospectus. For an overview you can find the key information document here.
As an investor in a certificate you should note that you bear, amongst others, the credit risk of the issuer (the risk that the issuer of the certificate or the guarantor are not able to fulfill the obligations under the product). The product is not capital-protected.
Certificates targeting other mega trends?
In addition to the tracker certificate that follows developments in artificial intelligence, Vontobel, an investment manager with Swiss roots has two further tracker certificates in the mega trend field: cyber security and artificial intelligence.
You can read more about investing in cyber security in our article on the topic here. Likewise, you can read more about Artificial Intelligence in our article here.
This information is neither an investment advice nor an investment or investment strategy recommendation, but advertisement. The complete information on the securities, in particular the structure and risks associated with an investment, are described in the base prospectus, together with any supplements, as well as the final terms.
It is recommended that potential investors read these documents before making any investment decision. The documents and the key information document are published on the website of the issuer, Vontobel Financial Products GmbH, Bockenheimer Landstrasse 24, 60323 Frankfurt am Main, Germany, on prospectus.vontobel.com and are available from the issuer free of charge. The approval of the prospectus should not be understood as an endorsement of the securities. The securities are products that are not simple and may be difficult to understand. This information includes or relates to figures of past performance. Past performance is not a reliable indicator of future performance.