Exchange Traded Funds (ETFs)

Invest in Lithium with This Fund

The Global X Lithium & Battery Tech ETF (NYSEARCA:LIT) invests in the full lithium cycle, starting with mining and refining the metal and finishing with battery production.

This ETF gives broad exposure to the metal, while offering targeted, concentrated exposure tilted toward micro-cap stocks. Good tracking of its underlying index tempers the fund’s variable spreads and high expense ratio. For investors looking for an exchange-traded fund (ETF) to gain exposure to the lithium niche, LIT is the only game in town.

LIT is heavily weighted in Asia, with 43.3% of its net assets in China, 11.7% in Korea and 6.7% in Japan; 22% in the United States; 5.2% in Australia; and 4.8% in Chile. Its top three holdings include 12.27% in Albemarle Corp. (NYSE:ALB); 5.36% in Ganfeng Lithium Co. (OTCMKTS:GNENF); and 5.35% in Tesla, Inc. (NYSE:TSLA).

Chart courtesy of StockCharts.com

The fund has amassed $1.42 billion in assets under management with 42 holdings and an average spread of 0.09%. Its expense ratio sits at 0.75%, which means it is relatively more expensive to hold in comparison to other exchange-traded funds. LIT currently trades around $55, giving it a 0.85% yield.

LIT tracks a market-cap-weighted index of global lithium miners and battery producers. 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.

Two main reasons to invest in this Global X fund are thematic exposure and efficient access. The fund is a thematic play on lithium and battery technology, and it offers efficient access to a broad basket of companies involved in lithium mining, lithium refining and battery production.

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However, I urge all interested investors to exercise their own due diligence to determine whether any stock or fund meets their own portfolio strategy and goals.

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.

Jim Woods

Jim Woods is a 20-plus-year veteran of the markets with varied experience as a broker, hedge fund trader, financial writer, author and newsletter editor. Jim is the editor of Successful Investing, the Bullseye Stock Trader, and The Deep Woods (formerly the Weekly ETF Report). His books include co-authoring, “Billion Dollar Green: Profit from the Eco Revolution,” and “The Wealth Shield: How to Invest and Protect Your Money from Another Stock Market Crash, Financial Crisis or Global Economic Collapse.” He’s also ghostwritten many books and articles, as well as edited content for some of the investment industry’s biggest luminaries. His articles have appeared on many leading financial websites, including StockInvestor.com, InvestorPlace.com, Main Street Investor, MarketWatch, Street Authority, Human Events and many others. Jim formerly worked with Investor’s Business Daily founder William J. O’Neil, helping to author training courses in the CANSLIM stock-picking methodology. The independent firm TipRanks rates Jim the No. 3 financial blogger in the world (out of more than 6,000). TipRanks calculates that, since 2012, he's made 361 successful recommendations out of 499 total, earning a success rate of 72% and a +15.3% average return per recommendation. He is known in professional and personal circles as “The Renaissance Man,” because his expertise includes such varied fields as composing and performing music; Western horsemanship, combat marksmanship, martial arts, auto racing and bodybuilding. Jim holds a BA in philosophy from the University of California, Los Angeles, and is a former U.S. Army paratrooper. A self-described “radical for capitalism,” he celebrates the virtue of making money from his Southern California horse ranch.