This thematic ETF tracks the STOXX Global Energy Storage & Materials Index. It holds stocks of companies in energy storage solutions such as batteries, hydrogen and fuel cells, as well as the materials companies that support them.

It suits investors who want exposure to the low-carbon transition and the long-term growth of the energy storage industry, and who can tolerate thematic volatility.

It is a passively managed (index-tracking) ETF run by iShares (BlackRock).

The fund holds the index constituents on a rules-based basis and tracks the performance of energy storage solutions and related materials companies. It invests most of its assets in the index constituents and in assets with similar economic characteristics. It is a non-diversified fund, so the weight of its top holdings is relatively large.

• Concentrated energy storage theme spanning batteries, hydrogen and fuel cells
• Diversified exposure across the entire value chain, including related materials companies

Assets under management (AUM) stand at $53.2M, and the total expense ratio is 0.47% per year.

As is typical for thematic ETFs, holdings concentration and volatility tend to be higher than for broad core index funds.

The clean energy and battery theme tends to swing widely depending on policy direction, commodity prices and electric vehicle demand. It reacts sensitively to growth expectations and investor sentiment.

Thematic fund flows come and go with energy transition policy and battery demand forecasts, and when risk appetite weakens, money can leave growth themes across the board.

Its strength is concentrated exposure to the energy storage theme, while holdings concentration and thematic volatility work as drawbacks.

For comparison within the same battery and energy storage theme, there are LIT and BATT, which invest in the lithium and battery value chain, and you can also consider REMX, which gives exposure to rare earths and strategic metals, key inputs for battery materials. To widen the theme to clean energy as a whole, ICLN and similar funds are alternatives. The TINT product shown in the table is another comparison point within the materials theme.

Here are the points to review before investing in IBAT. Because it is a thematic ETF, it is wise to check costs, holdings concentration, thematic volatility and exchange rates in advance, and to consider its weight in your portfolio and your investment horizon together.

Short-term volatility tends to be large because of the thematic focus and concentrated holdings, and changes in policy direction, commodities and electric vehicle demand directly affect performance. Declines can deepen when risk appetite weakens.

It is a suitable choice for investors who want exposure to the long-term growth of the energy storage theme. However, because volatility and holdings concentration are high, it is best used as a satellite holding in a portfolio.