These EV ETFs are among the best in class.
Exchange-traded funds are a great way to diversify an investment portfolio, especially when it comes to volatile, early-stage industries like the electric vehicle business. The past year has been extremely difficult for EV investors. Soaring energy prices have made fossil fuel stocks top performers, while rising interest rates have weighed on high-growth tech stocks. It may be years before investors get a clear picture of which EV startups will dominate the global market, which is why investors should consider minimizing risk by taking a diversified approach to EV investing. Here are seven top electric vehicle ETFs for investors to consider.
Global X Lithium & Battery Tech ETF (ticker: LIT)
This Global X fund, which has been around since 2010, targets lithium miners and battery producers, key suppliers for the EV industry. The LIT fund has $4.4 billion in assets under management and an average daily trading volume of about 733,000 shares. Because the LIT fund is highly exposed to soaring lithium prices, it’s the only fund on this list that has outperformed the S&P 500 in the past year. The fund has a 0.75% expense ratio and only about 39 stockholdings. Top holdings include Albemarle Corp. (ALB), EVE Energy Co. Ltd. and BYD Co. Ltd. (BYDDY).
Global X Autonomous & Electric Vehicles ETF (DRIV)
The DRIV ETF was launched in 2018 and is constructed to invest in companies exposed to electric vehicles, EV components and autonomous vehicle technology. Stocks are selected for inclusion based on how frequently each company is mentioned in relation to specific keywords in financial news reports and other public documents. The DRIV fund has $891.3 million in assets under management and plenty of liquidity at an average daily trading volume of about 225,000 shares. The fund has an expense ratio of 0.68%. Top holdings include tech giants Apple Inc. (AAPL) and Alphabet Inc. (GOOG, GOOGL), and automaker Toyota Motor Corp. (TM).
Amplify Lithium & Battery Technology ETF (BATT)
The BATT fund invests in companies that meet one of the following three criteria: generates at least half of revenue from the mining or production of lithium, cobalt, nickel, manganese or graphite; holds at least a 10% global market share for advanced battery materials; or derives at least 90% of revenue from EV production. The fund has a 0.59% expense ratio, $183.5 million in AUM and an average daily trading volume of about 113,000 shares. Top holdings include Chinese battery manufacturer Contemporary Amperex Technology Co. Ltd., as well as EV makers BYD and Tesla Inc. (TSLA).
iShares Self-Driving EV and Tech ETF (IDRV)
IDRV is iShares’ popular EV ETF that invests in companies that produce autonomous vehicles, electric vehicles, EV batteries, or EV-related technologies or products. The fund tracks the NYSE FactSet Global Autonomous Driving and Electric Vehicle Index. The IDRV fund has $434.9 million in assets under management and an average daily trading volume of about 69,000 shares. Its expense ratio is 0.47%, the lowest management fee among the largest, most-liquid EV ETFs. It also has 117 total holdings, making it significantly more diversified than the larger DRIV fund. Top investments include Tesla, Alphabet and Apple.
KraneShares Electric Vehicles and Future Mobility ETF (KARS)
The KARS fund invests in companies that generate significant revenues from EVs, energy storage technologies, AV technologies, lithium and copper mining, and hydrogen fuel cells. The KARS fund is the only one on this list that tracks the Bloomberg Electric Vehicles Index. The fund is highly diversified, with 68 holdings that vary by market cap and business focus to mitigate risk. The KARS fund has $246.3 million in AUM and a 0.7% expense ratio, and averages about 53,000 in daily trading volume. Top holdings include Chinese EV and battery leaders Nio (NIO), Contemporary Amperex Technology and BYD.
SPDR S&P Kensho Smart Mobility ETF (HAIL)
The HAIL ETF tracks the S&P Kensho Smart Transportation Index. The HAIL fund was launched in 2017 and holds a basket of about 94 next-generation transportation companies, including stocks specializing in AV and EV technology, drone technology, and advanced tracking and transport systems. Its more broad focus on transportation makes the HAIL fund potentially more resistant to auto market downturns than other EV funds. The fund has $77.1 million in AUM, average daily trading volume of more than 10,000 shares and a low 0.45% expense ratio. Top holdings include Faraday Future Intelligent Electric Inc. (FFIE), Li Auto Inc. (LI) and XPeng Inc. (XPEV).
Fidelity Electric Vehicles and Future Transportation ETF (FDRV)
The FDRV ETF is one way for risk-tolerant EV investors to minimize their fund-management fees. The FDRV fund holds a basket of 51 stocks that are exposed to EV and AV technology. Top holdings include Tesla, Nio and auto chipmaker Qualcomm Inc. (QCOM). Investors betting on the FDRV fund should understand the risks involved with the fund’s relatively small $39.5 million AUM and daily trading volume of about 15,000 shares. The FDRV fund has the lowest year-to-date performance among these seven EV funds; however, the fund’s expense ratio is only 0.39%, the lowest on this list.
7 EV ETFs to gear up for a next-gen auto market:
— Global X Lithium & Battery Tech ETF (LIT)
— Amplify Lithium & Battery Technology ETF (BATT)
— Global X Autonomous & Electric Vehicles ETF (DRIV)
— iShares Self-Driving EV and Tech ETF (IDRV)
— KraneShares Electric Vehicles and Future Mobility ETF (KARS)
— SPDR S&P Kensho Smart Mobility ETF (HAIL)
— Fidelity Electric Vehicles and Future Transportation ETF (FDRV)
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Update 07/21/22: This story was published at an earlier date and has been updated with new information.