Global X, an exchange traded fund provider known more for its targeted investment themes, has rolled out an autonomous and electric car strategy to help investors capitalize on the new direction in the automobile industry.
On Tuesday, Global X launched the Global X Autonomous & Electric Vehicles ETF (NasdaqGM: DRIV), which has a 0.68% expense ratio.
“Electric and autonomous vehicles are poised to have one of the most profound impacts on society since the industrial revolution, affecting a wide range of sectors in ways that we’ve only just begun to imagine,” Jay Jacobs, director of research at Global X Funds, said in a note. “In bringing DRIV to market, we’re excited to deliver access to revolutionary shifts in transportation that are at the early stages of their disruptive potential. And we’re equally excited to watch how these technologies will change our daily lives.”
Electric vehicles are in the early innings of development and there are signs that there is a lot of pent up demand among consumers whom want to embrace the technology. In 2017, electric vehicle sales represented 1.7% of all vehicle sales globally, exceeding 1 million for the first time and rising 51% year-over-year. The rate could continue to accelerate as a result of EVs becoming more economical than gas-powered cars and as a result of a pro-climate regulatory changes pushing to ban gas-powered cars.
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While autonomous vehicles are not as widespread as electric vehicles, the goal of full automation is already under way. According to RethinkX, by freeing drivers from spending time driving, autonomous vehicles could boost U.S. GDP by $0.5 to $2.3 trillion by 2030. Additionally, by removing the need for humans to park cars, we could see parking spaces shrink in size and free up more space.
The Global X Autonomous & Electric Vehicles ETF tries to reflect the performance of the Solactive Autonomous & Electric Vehicles Index, which includes companies that are involved in the development of electric vehicles and/or autonomous vehicles, including companies that produce electric/hybrid vehicles, electric/hybrid vehicle components and materials, autonomous driving technology, and network connected services for transportation, according to a prospectus sheet.
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Top holdings include Samsung Electronics 3.1%, Intel 3.1%, Microsoft 3.1%, Toyota Motor 3.1% and Apple 3.0%. Sector weights include information technology 43.6%, consumer discretionary 32.6%, materials 14.9% and industrials 8.9%.
Top country weights include U.S. 52.1%, Japan 8.5%, Germany 8.0%, South Korea 6.6% and Britain 6.5%.
For more information on new fund products, visit our new ETFs category.