Smartphones and electric cars are just a couple of common uses for lithium battery technology, but Japanese start-ups are looking for more ways to utilize batteries. As such, this could charge up the Global X Lithium & Battery Tech ETF (NYSEArca: LIT).
“What is the future of batteries? From smartphones to drones to electric cars, the current source of energy is the lithium-ion battery. But start-ups in Japan are battling to create high-performance power packs that could become the next global standard,” noted a Financial Times article.
Per an Energy Storage News report, “a new lithium battery recycling facility, established by operator Li-Cycle on a commercial basis at the well-known Eastman Business Park in New York State, answers both a growing need and an opportunity in an ‘unprecedented phase’ of deployment, the company has said.”
“The deployment of Li-Cycle’s Rochester facility marks a major milestone for the company and just a first step to address this global mass-market opportunity,” the company said. “As the world enters an unprecedented phase of lithium-ion batteries across a broad spectrum of products and industries, lithium-ion battery waste is forecasted to hit anywhere from one to four million tonnes per year globally by 2030, depending on the source of the study. This translates into a potential material value to be recovered from lithium-ion batteries of US$6 billion by 2030.”
ETFs To Consider
ETF investors who want to take advantage of the latest startups in disruptive battery technology can take a look at LIT. The fund seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of the Solactive Global Lithium Index.
The fund invests at least 80% of its total assets in the securities of the underlying index and in American Depositary Receipts and Global Depositary Receipts based on the securities in the underlying index. The underlying index is designed to measure broad-based equity market performance of global companies involved in the lithium industry.
For a broad-based play in Japan, ETF investors can check out the iShares MSCI Japan ETF (EWJ). EWJ seeks to track the investment results of the MSCI Japan Index, which consists of stocks traded primarily on the Tokyo Stock Exchange. It may include large- or mid-capitalization companies.
Another fund to consider is the WisdomTree Japan Hedged Equity Fund (DXJ). DXJ seeks to track the price and yield performance of the WisdomTree Japan Hedged Equity Index, which is designed to provide exposure to Japanese equity markets while at the same time neutralizing exposure to fluctuations of the Japanese yen relative to the U.S. dollar.
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