ETF Hearsay: Hydrogen and Fuel Cell ETF filed: Defiance

Defiance Next Gen H2 ETF

Ticker: HDRO
Exchange: NYSE arca
Expense ratio: TBD
Original filing date: December 22, 2020
Effective date: March 08, 2021
Listing date: TBD
CUSIP: TBD
Active: No
Index: BlueStar Global Hydrogen & NextGen Fuel Cell Index

Index provider: MV Index Solutions GmbH

Constituents: 25

Investment Objective: Track the total return performance, before fees and expenses, of the BlueStar Global Hydrogen & NextGen Fuel Cell Index.

Investment Strategy: The Fund tracks the total return performance, before fees and expenses, of the BlueStar Global Hydrogen & NextGen Fuel Cell Index.

BlueStar Global Hydrogen & NextGen Fuel Cell Index

The Index is a rules-based index that tracks the performance of a group of globally listed equity securities of companies involved in the development of hydrogen-based energy sources, fuel cell technologies, and industrial gases.

The Index is comprised of both “core” and “non-core” companies.

“Core” companies are those that generate at least 50% of their revenue from

(i) products that facilitate energy production from hydrogen,
(ii) fuel cells, or
(iii) the production of industrial gases (including hydrogen).

“Non-core” companies are those whose business includes

hydrogen-based energy production,
fuel cells,
hydrogen gas production, or
technology and equipment that facilitates energy production from hydrogen, but do not otherwise qualify as “core” companies and are not vehicle manufacturers.

At the time of each quarterly rebalance of the Index, Index constituents are weighted using a modified market-capitalization methodology that

caps the weight of the group of non-core companies to 20%,
limits the weight of any individual security to 10% (4% for industrial gas companies), and
adjusts the weight of a constituent downward based on certain liquidity criteria.

...

Once included in the Index, companies are eligible to remain in the Index at lower investibility thresholds, and core companies will not lose their “core” designation unless they earn less than 25% of their revenue from (i) products that facilitate energy production from hydrogen, (ii) fuel cells, or (iii) the production of hydrogen gas.

The Index is rebalanced quarterly, effective after the close of trading on the third Friday of each March, June, September, and December.

The Index is reconstituted as part of the rebalance in each June and December.

For each rebalance and reconstitution of the Index, Index constituents and their weights are determined based on data prior to the Rebalance Date.