Exciting trends and themes are always appearing in the market and, unlike a decade or so ago, investors today easily can tap them through exchange-traded funds (ETFs), such as the Global X Lithium & Battery Tech ETF (LIT).
Lithium and batteries are a theme many investors will recognize due to their association with electric vehicles already introduced by Tesla Motors (NASDAQ: TSLA), General Motors (NYSE: GM), Nissan Motor Co., Ltd. (OTCMKTS: NSANY) and other manufacturers. Each of those car builders uses lithium-based battery technology.
Tesla recently made headlines for its attempt to start lithium-ion battery production at its new Gigafactory in Nevada. The Gigafactory is projected to employ 6,500 full-time workers by 2018 and singlehandedly double the world’s production capacity for lithium-ion batteries, according to Tesla.
In addition to investing in companies that produce lithium batteries, LIT also invests in lithium mining operations. Assets under management for LIT total $207 million.
The expense ratio is 0.75%, but it does offer a 0.61% dividend yield to help offset that fee. Over the last 12 months, the fund has returned an incredible 30% as the lithium phenomenon truly took off. Returns in prior years weren’t nearly as strong, compared to the show of sudden vivacity in the momentum-gaining lithium-ion battery trend.
Top holdings for LIT include FMC Corp. (FMC), 24.70%; Sociedad Quimica y Minera (SQM), 14.90%; Samsung, 6.32%; Tesla Motors (TSLA), 6.04%; and Albemarle Corp. (ALB), 5.02%.
If you believe the trend upwards in the lithium battery industry and related technologies is only just beginning, Lithium & Battery Tech ETF (LIT) could be a strong position for your portfolio.
As always, I am happy to answer any of your questions about ETFs, so do not hesitate to send me an email. You just may see your question answered in a future ETF Talk.
“Congratulations on your work. It has been a long slog to get the national accounts…
The broken wing butterfly and the butterfly spread are two different types of option trading…
The bear call spread and the bear put spread are option strategies used when an…
It’s not often that you hear the brilliant Austrian school economist Ludwig von Mises referenced…
While Charles Dickens’s famous statement, “It was the best of times, it was the worst…
Five advantages to day-trading with a 90% win rate offer a tempting opportunity. The five…