Global X Hydrogen ETF (ASX: HGEN)

The Global X Hydrogen ETF (HGEN) provides targeted exposure to the emerging hydrogen economy, a critical frontier in the global transition toward decarbonisation. By tracking the Solactive Global Hydrogen ESG Index, the fund invests in thirty leading companies across the hydrogen value chain, including specialists in fuel cells, electrolysers, and refuelling infrastructure.

This thematic approach captures the growth of green hydrogen as a sustainable substitute for fossil fuels in high-emission industries such as steelmaking, shipping, and ammonia production. HGEN employs a sophisticated selection process, utilising natural language processing and rigorous ESG screening to identify pure-play and non-pure-play innovators in developed markets. The fund offers a strategic opportunity to hedge against fossil fuel disruption and diversify portfolios with industrial segments largely absent from the local market, positioning investors at the forefront of a systemic shift toward zero-emission energy solutions.

HGEN invests in hydrogen companies around the world. Hydrogen is being explored as a way of cleaning up sectors of the economy that have proved hard to rid of fossil fuels in the past. HGEN tracks the Solactive Global Hydrogen ESG Index, which contains 30 hydrogen companies in developed markets, Taiwan and Korea. It invests in companies from across the value chain, including hydrogen fuel cells, refuelling stations, electrolysers and more.

The Global X Hydrogen ETF (HGEN) seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of the Solactive Global Hydrogen ESG Index.

• Hydrogen has three times the energy potential of petrol on a weight-for-weight basis.
• Hydrogen produces only water vapour when it is combusted and no greenhouse gases.
• Green hydrogen is created by zapping water with electricity to split it into hydrogen and oxygen.

Hydrogen is being explored by governments and investors as a way of removing carbon dioxide from a wide range of industries – like steelmaking, ammonia production, shipping – that are heavily polluting. For example, coal is burnt in blast furnaces as a reduction agent when creating steel. But hydrogen can be used as a substitute while producing no carbon dioxide emissions.

Hydrogen is not new. But today more than 95% of it comes from fossil fuels like methane and coal. What is new – and potentially exciting – is the growth of green hydrogen, which is created by using clean energy to split water into hydrogen and oxygen. Green hydrogen promises a quiet energy revolution, as it can remove fossil fuels from hydrogen production. Turning hydrogen green, and then using green hydrogen to decarbonise industry, is sometimes called the “hydrogen economy”.

The hydrogen industry is made up of specialised components including:

• Fuel Cells: are like the engine that is used to turn hydrogen into electricity and energy. They can be used in car engines, in central heating, or in other areas like data centres.
• Electrolysers: are machines that zap water with electricity and split it into its component gases, hydrogen and oxygen. They are crucial for producing green hydrogen.
• Refueling Stations: are similar to petrol stations but for hydrogen. They are where ships, or other vehicles refuel their hydrogen tanks.
• Ammonia: is the main ingredient in fertilisers, used in agriculture. It is created by reacting hydrogen with nitrogen from the air.
• Green Hydrogen: is made from water using renewable electricity. It differs from other “colours” of hydrogen – such as grey, brown and blue – in that no fossil fuels are consumed in its creation.

• HGEN tracks the Solactive Global Hydrogen ESG Index.
• The index is made of 30 hydrogen businesses in developed markets, plus Korea and Taiwan.
• Hydrogen companies are identified by Solactive using natural language processing, which reads through companies’ public documents, websites and media releases to determine their primary business activities.
• Identified hydrogen companies are split between pure play and non pure-play using FactSet’s RBICS sector classification system. Those in RBICS sub industries: Fuel Cell Equipment, Technology Providers, Thermal and Chemical Processing Machinery Makers are identified as “pure plays”. Those outside these sectors are non pure plays.
• The index universe includes an environmental, social and governance (ESG) screen that removes companies noncompliant with the UN Global Compact Principles; and companies producing revenue from Controversial Weapons, Small Arms, Gambling, Recreational Cannabis & Tobacco, Thermal Coal, Conventional and Unconventional Oil & Gas.
• The top 30 companies by market capitalisation are picked, with the weights of pure-plays capped at 10% and the weights of non pure plays capped at 4%.

• To express long-term strategic or short-term tactical views on the hydrogen economy.
• To hedge against disruption to fossil fuel companies, which often feature in investors’ portfolios.
• To aid portfolio diversification via investment in industries that are largely absent from the Australian market.

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The issuer of units in Global X Hydrogen ETF (HGEN) ARSN: 651 638 630 is the responsible entity of the Fund, being Global X Management (AUS) Limited (AFSL 466778) ("Global X"). The product disclosure statement (PDS) for the Fund contains all of the details of the offer of units in the Fund. Copies of the PDS are available from Global X Management (AUS) Limited or at www.globalxetfs.com.au. In respect of each retail product, Global X has prepared a target market determination (TMD) which describes the type of customers who the relevant retail product is likely to be appropriate for. The TMD also specifies distribution conditions and restrictions that will help ensure the relevant product is likely to reach customers in the target market. Each TMD is available at www.globalxetfs.com.au. The information provided in this document is general in nature only and does not take into account your personal objectives, financial situations or needs. Before acting on any information in this document, you should consider the appropriateness of the information having regard to your objectives, financial situation or needs and consider seeking independent financial, legal, tax and other relevant advice having regard to your particular circumstances. Any investment decision should only be made after obtaining and considering the relevant PDS and TMD. Investments in any product issued by Global X are subject to investment risk, including possible delays in repayment and loss of income and principal invested. None of Global X, the group of companies which Mirae Asset Global Investments Co., Ltd is the parent, or their respective directors, employees or agents guarantees the performance of any products issued by Global X or the repayment of capital or any particular rate of return therefrom. The value or return of an investment will fluctuate and an investor may lose some or all of their investment. Past performance is not a reliable indicator of future performance.

The financial instrument is not sponsored, promoted, sold or supported in any other manner by Solactive AG, nor does Solactive AG offer any express or implicit guarantee or assurance either with regard to the results of using the Solactive Global Hydrogen ESG Index (the “Index”) and/or Index trade mark or the Index price at any time or in any other respect. The Index is calculated and published by Solactive AG. Solactive AG uses its best efforts to ensure that the Index is calculated correctly. Irrespective of its obligations towards the Sponsor, Solactive AG has no obligation to point out errors in the Index to third parties including, but not limited to, investors and/or financial intermediaries of the financial instrument. Neither publication of the Index by Solactive AG, nor the licensing of the Index or Index trade mark for the purpose of use in connection with the financial instrument, constitutes a recommendation by Solactive AG to invest capital in said financial instrument nor does it in any way represent an assurance or opinion of Solactive AG with regard to any investment in this financial instrument.