Given the relatively new industry and the heavy capital expenditures required to gradual build up production, Wilmot warned that investors may require a very long-term view. Investors, though, can still capitalize on growth opportunities further up the supply chain such as Sumitomo Metal Mining and Umicore.
The Global X Lithium & Battery Tech ETF (LIT) tries to reflect the performance of the Solactive Global Lithium Index, which is comprised of a number of global lithium producing companies and lithium battery producers. Top components include Albemarle 19.1%, FMC 16.5%, Quimica Y Minera 6.7%, LG Chem 5.4%, Samsung SDI 5.3%, Panasonic 4.9%, Enersys 4.6%, GS Yuasa 4.6%, BYD Co 4.3% and Tesla Motors 4.1%. Country weights include US 37.2%, Chile 18.2%, South Korea 13.3%, Australia 8.1%, Japan 7.9%, Taiwan 4.7%, China 4.3, Canada 3.2%, Hong Kong 2.9% and France 0.3%.
Given its diverse country exposure and access across the supply chain of lithium and lithium-related products, LIT could provide diversified exposure to the growing industry and limit potential concerns of a slow build up in the battery business.
For more information on the materials space, visit our basic materials category.