As new technologies increasingly rely on advanced batteries, Amplify Investments has developed a new ETF covering the components that go into the production of new batteries.
Amplify recently launched the actively managed Amplify Advanced Battery Metals and Materials ETF (NYSEArca: BATT), which has a 0.72% expense ratio.
The portfolio is managed by Michael Venuto, Chief Investment Officer at Toroso, and Charles A. Ragauss, Director of Product Management at Exponential ETFs.
“The recent boom in battery-powered electric vehicles, smart devices and large-scale energy storage solutions may be the tip of the iceberg for this investment opportunity,” Christian Magoon, CEO of Amplify ETFs, said in a note. “As the demand and science behind efficient battery solutions matures, BATT’s actively managed approach across multiple metals and materials will seek to adapt the fund’s holdings in order to optimize investment exposure to this dynamic space.”
The Amplify Advanced Battery Metals and Materials ETF will try to provide investors with total return by investing in companies engaged in the mining, exploration, production, development, processing or recycling of the metals and materials being utilized in advanced battery technologies, such as Lithium, Cobalt, Nickel, Manganese and Graphite, according to a prospectus sheet. BATT’s metal weight exposures include lithium 28.4%, cobalt 25.3%, manganese/graphite/recycling 21.5% and nickel 21.1%.
Opportunity in Advanced Battery Materials
“We see a significant opportunity to capitalize on segments of an industry where we are in the early stages of growth. Batteries aren’t just about lithium anymore; investors may need to own a broader basket of metals and materials to best capture the future growth potential associated with the battery market,” Magoon added.
Underlying components must derive 50% or more of their revenue, or be in the top five and have at least 10% of global market share, of any advanced battery material. The portfolio managers will also weight companies by screening the current balance between supply and demand for each Advanced Battery Material, forecasted demand growth, commodity price outlook, likelihood of new supply discovery and regulatory and geo-political risk.
Furthermore, allocations may be tactically adjusted based on the financial fundamentals of a company; the inventory and reserves of an Advanced Battery Material relative to its price; a company’s Environmental, Social and Governance (ESG) score; and the discovery of new reserves or other causes of increased or new Advanced Battery Material production.
Top holdings include Katanga Mng 4.2%, China Molybdenum 3.6%, Lundin Mining 3.5%, Sociedad Quimica Minera De Chi Spon 3.4% and Albemarle Corp 3.3%.
For more information on new fund products, visit our new ETFs category.