Fund flows can help give investors a signpost to where money is flowing in a recovering economy. Right now, ETF provider Global X is seeing interest in the Global X Lithium & Battery Tech ETF (LIT) and the Global X Autonomous & Electric Vehicles ETF (DRIV).
Fund flows in both funds show an obvious tilt towards electric vehicles. With a lithium shortage underway, investors are seeing this scarcity as a catalyst for higher prices that could feed into electric vehicles.
LIT seeks to provide investment results that correspond generally to the price and yield performance of the Solactive Global Lithium Index, which is designed to measure broad-based equity market performance of global companies involved in the lithium industry. LIT gives investors:
- Efficient Access: LIT offers efficient access to a broad basket of companies involved in lithium mining, lithium refining, and battery production.
- Thematic Exposure: The fund is a thematic play on lithium and battery technology.
DRIV seeks to invest in companies involved in the development of autonomous vehicle technology, electric vehicles (‘EVs’), and EV components and materials. This includes companies involved in the development of autonomous vehicle software and hardware, as well as companies that produce EVs, EV components such as lithium batteries, and critical EV materials such as lithium and cobalt.
The ETF seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of the Solactive Autonomous & Electric Vehicles Index. The fund offers:
- High Growth Potential: DRIV enables investors to access high growth potential through companies critical to the development of autonomous and electric vehicles – a potentially transformative economic innovation.
- An Unconstrained Approach: DRIV’s composition transcends classic sector, industry, and geographic classifications by tracking an emerging technological theme.
- ETF Efficiency: In a single trade, DRIV delivers access to dozens of companies with high exposure to the autonomous and electric vehicles theme. Having the disruptive automotive industry in an ETF wrapper also gives traders access to short-term market maneuvers in this sub-sector.
A Pair of Strong Performers
Both LIT and DRIV are giving ETF investors something to talk about. LIT is up over 100% the past year, while DRIV is up almost 80%.
Venture capitalists are loving lithium-based companies. OilPrice.com reported that “lithium-ion based battery technology companies received the most VC funding in 2020, with $649 million.” It’s an obvious play on the anticipation that more electric vehicles will eventually be on the road.
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