Data Collaboration Should Rally Investors Around This ETF

Critical mineral reliance is paramount when it comes to putting more electrical vehicles (EVs) on the road, and thus, more countries are relying on data collaboration, which should generate interest in the Invesco Electric Vehicle Metals Commodity Strategy No K-1 ETF (EVMT).

Countries abundant in the supply of critical minerals are seeing more interest from other nations looking to harness these resources as the global shift to clean energy technology continues. However, to locate these minerals, data scientists can provide much-needed information to mine these resources more efficiently.

A CleanTechnica article cited a collaboration between Australia, Canada, and the United States, which resulted in the release of a compilation of global geological, geophysical, and mineral resource datasets via the U.S. Geological Survey (USGS). This combination of data sets will help provide important information in sourcing critical minerals as demand for EVs continues.

“These standardized datasets, spanning the continents of Australia and North America, enable unique investigations into the controls on critical mineral distribution. This was simply not possible beforehand,” said Geoscience Australia scientist Karol Czarnota. “I’m sure they will be a foundation for ongoing research and innovation for many years to come.”

An Electrifying Opportunity in EV Metals

With much investment growth to be extracted from critical minerals, EVMT seeks to achieve its investment objective by investing in commodity-linked futures and other financial instruments that provide exposure to a diverse group of metals commonly used to produce EVs. Per its fund description, EVMT seeks to track the S&P GSCI Electric Vehicle Metals Index, which tracks commodities used in the manufacturing of electric vehicles.

EVMT focuses explicitly on the upstream components (raw materials and supplies) of the EV global manufacturing process. This includes cobalt, aluminum, nickel, iron ore, and copper. As such, it specifically provides investors exposure to metals that are imperative in the manufacturing of EVs.

EVMT’s portfolio is dominated by nickel, which comprises almost 40% of the fund’s assets as of August 18. Its inclusion in the fund is critical given the metal’s importance in creating batteries for EVs. Thus, it gets the heaviest exposure.

“This is because nickel batteries have nearly twice the energy density of other materials,” the Nickel Institute explained. “A lithium-ion (Li-ion) battery that uses nickel helps increase driving range. So, you make it to work on time, and the kids get their lunch. Nickel also weighs less and takes up less room. So, an EV battery that uses nickel can be smaller, leaving more space for cargo and people.”

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