While many commodities ETFs fell in the past five days, the Invesco Electric Vehicle Metals Commodity Strategy No K-1 ETF (EVMT) continued climbing, largely unfazed.
EVMT is an actively managed ETF that offers access to upstream electric vehicle transition themes by offering exposure to commodities critical to producing electric vehicles. This approach allows investors the ability to focus solely on industrial metals rather than a midstream investment in companies that manufacture batteries and electric vehicles.
EVMT has returned 20.61% in the past three months and 17.25% in the past one-month period. The fund has gained 3.18% in the past five days, compared to the Bloomberg Commodity Index’s decline of -3.21% during the same period.
“EVMT has a short yet strong performance record due to its focus on commodities that will be needed to support the rapidly growing electric vehicle market being spurred on by government incentives,” Todd Rosenbluth, head of research at VettaFi, said. “Most commodity ETFs include exposure to energy and or precious metals not directly connected to global manufacturing.”
EVMT invests in derivatives and other financially linked instruments to gain exposure to metals critical to electric vehicle production. As of December 7, these metals currently include nickel (42.54%), copper (27.55%), aluminum (17.99%), cobalt (6.19%), and iron ore (5.67%), according to Invesco.
The active structure of the ETF gives it the potential to expand both the number and type of metals included in the ETF as electric vehicle production and technology evolve, according to a statement from the firm.
Global “net-zero” efforts should lead to higher demand for industrial metals because metal consumption in renewables is five to seven times higher than traditional power, according to Goldman Sachs’ 2022 outlook: cyclical weakness priced in, structural upcycle remains intact.
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