Summary: Hydrogen energy solutions are becoming more and more popular, and a growing number of investors are setting their sights on companies operating within the sector, hoping to capitalize on its growth and technological innovation. In this guide, we’re going over the top 3 hydrogen ETFs to invest in on trading platforms such as Interactive Brokers and gain diversified exposure to this booming market.
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Trade on 150 markets globally from a single platform (stocks, ETFs, futures, currencies, crypto & more)
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What are hydrogen ETFs?
Hydrogen exchange-traded funds (ETFs) are investment funds traded on stock exchanges, with a specific focus on companies within the hydrogen sector of the chemical and energy industries. These funds generally comprise a diversified portfolio of stocks associated with the development, distribution, and implementation of hydrogen-based solutions.
Many analysts predict that hydrogen is going to play a pivotal role in the upcoming decades, seeing how we’re becoming more concerned with climate change and seeking more sustainable energy solutions. What’s more, the shift to green, renewable energy is not limited to a single sector, so investing in it has the potential to give investors exposure to a number of industries.
Top 3 hydrogen ETFs to buy in 2024
Here are our top 3 hydrogen ETFs to buy in 2024 if you’re looking for exposure to the hydrogen sector:
- L&G Hydrogen Economy UCITS ETF (HTWO);
- Global X Hydrogen ETF (HYDR);
- Defiance Next Gen H2 ETF (HDRO).
Let’s take a closer look at each of them.
1. L&G Hydrogen Economy UCITS ETF
Total Net Assets (as of January 2024): ~$420 million
Fund Inception Date: 1 February, 2021
Built to track the Solactive Hydrogen Economy Index, the L&G Hydrogen Economy UCITS ETF focuses on 27 companies involved in hydrogen production, storage, transportation, and utilization, and is one of the largest ETFs of its kind. As such, it tracks some of the leaders in the industry, such as Bloom Energy, Siemens Energy Corp., and Hyundai Motors. All dividends in the ETF are accumulated and reinvested in the fund.
HTWO price today
Your capital is at risk.
2. Global X Hydrogen ETF (HYDR)
Total Net Assets (as of January 2024): ~$34 million
Fund Inception Date: 12 July, 2021
The Global X Hydrogen ETF (HYDR) is another fund designed to mirror the performance of the Solactive Global Hydrogen Index and thus companies engaged in hydrogen production, fuel integration, and hydrogen fuel cell advancement. The fund chooses its holdings based on price and yield performance specifically. Moreover, it invests more than 80% of its total assets and borrowings in the securities of the index and in American Depositary Receipts (ADRs) and Global Depositary Receipts (GDRs).
HYDR price today
Your capital is at risk.
3. Defiance Next Gen H2 ETF (HDRO)
Total Net Assets (as of January 2024): ~$22 million
Fund Inception Date: 9 March, 2021
The smallest on our list, The Defiance Next Gen H2 ETF (HDRO) tracks the BlueStar Global Hydrogen and Next Gen Fuel Cell Index, investing in companies generating at least half of their revenue from hydrogen-based energy sources, fuel-cell technologies, industrial gases, and related sources. At least 80% of the fund’s net assets are reinvested in hydrogen companies such as Plug Power, Doosan Fuel Cell, and Ballard Pwr Sys Inc.
HDRO price today
Your capital is at risk.
Where to buy Hydrogen ETFs?
To invest in hydrogen ETFs on our list securely and conveniently, we recommend Interactive Brokers a leading investment platform that offers:
- Commission-free ETF trading;
- Stock trading on 90+ market centers;
- Fractional stock trading;
- Extra income on fully paid shares;
- Lowest financing rates for margin accounts in the industry;
- No account minimums.
Best Platform for Worldwide Stock Trading & Investing
-
Highly trusted multi-asset broker with clients in over 200 countries
-
Trade on 150 markets globally from a single platform (stocks, ETFs, futures, currencies, crypto & more)
-
Low commissions starting at $0 with no platform fees or account minimums
-
Easily fund your account and trade assets in 26 currencies
-
IBKR pays up to 4.58% interest on cash balances of $10k or more
– How to buy Air Products stock;
– How to buy Plug Power stock;
– How to buy Bloom Energy stock;
– How to buy Linde stock.
Pros and cons of investing in hydrogen ETFs
Pros
- Diversification: Investing in a hydrogen ETF can help you diversify your holdings across multiple companies really quickly;
- Growth potential: The hydrogen sector is young, but it’s expected to grow as we continue seeking cleaner energy alternatives;
- Liquidity: ETFs are traded like stocks, so you can easily buy and sell them;
- Innovation and technological advancements: As hydrogen technology evolves, companies pushing it might make breakthroughs and profit significantly.
Cons
- Market volatility: The hydrogen sector can be volatile, as many aspects of the technology behind it are still new and thus speculative in nature.
- Regulatory risks: Regulatory policies can have a huge impact on the hydrogen sector;
- Technological risks: Hydrogen-related tech is still evolving, so companies in the sector might face challenges trying to develop new solutions;
- Competition: As the hydrogen industry grows, more companies will enter the fray and compete.
Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.
FAQs about investing in hydrogen ETFs
What is a hydrogen ETF?
A hydrogen exchange-traded fund is a type of investment fund that tracks stocks related to the hydrogen industry.
What is the best way to invest in hydrogen?
The best way to invest in hydrogen is to buy stocks in companies involved in the production and distribution of hydrogen-based products or to invest in exchange-traded funds that track stocks tied to the hydrogen industry.
Are there any hydrogen ETFs?
Hydrogen ETFs worth checking out are L&G Hydrogen Economy UCITS ETF (HTWO), Global X Hydrogen ETF (HYDR), and Defiance Next Gen H2 ETF (HDRO).
How can I buy and sell hydrogen ETFs?
Hydrogen ETFs are traded on stock exchanges, so you can buy and sell them through a brokerage account.
How to invest in hydrogen ETFs?
To buy hydrogen ETFs, you can open an account with an online broker, fund it, and buy ETFs that catch your eye.
Where to buy hydrogen ETFs?
You can invest in hydrogen ETFs through regulated online brokers, such as Interactive Brokers.
Are hydrogen ETFs a long-term investment?
Hydrogen ETFs can be long-term investments for those seeking exposure to the potential future growth of the hydrogen sector.
How are dividends handled in hydrogen ETFs?
Most ETFs reinvest dividends.
Best Platform for Worldwide Stock Trading & Investing
-
Highly trusted multi-asset broker with clients in over 200 countries
-
Trade on 150 markets globally from a single platform (stocks, ETFs, futures, currencies, crypto & more)
-
Low commissions starting at $0 with no platform fees or account minimums
-
Easily fund your account and trade assets in 26 currencies
-
IBKR pays up to 4.58% interest on cash balances of $10k or more
