This ETF is LIT. Is Global Tech Lithium & Battery a EV portfolio must have?
DECEMBER 5TH, 2020
AUTHOR: KEVIN STILLERMAN
Building an EV Investment Portfolio
The EV revolution is upon us, and investors are eager to capitalize on this electric vehicle movement. Tesla Inc currently dominates the EV market, and as an outcome its stock (TSLA) is nearly 10X in value from just 1 year ago.
While TSLA is without a doubt the number one stock that should be in your EV portfolio, there are other EV options that can help you diversify and potentially further increase your gains.
As we all know, electric vehicle are powered by lithium ion batteries. So where do lithium ion batteries come from? There are countless supporting industries and businesses that are to feed EV companies such as Tesla with massive amount of battery cells.
Supporting industries include the mining and refining of the lithium and raw materials all the way through the final battery production process.
What is LIT?
Are you ready to get LIT!? The Global X Lithium & Battery Tech ETF (LIT) invests in the full lithium cycle, from mining and refining the metal, through battery production.
Purchasing a share of LIT allows an investor to buy into the EV battery cell production market segment (rather than investing in an individual EV stock). For this reason it is a more diversified option.
Here is a current list of LIT’s top 10 holdings:
| Company | Ticker | Asset % |
|---|---|---|
| ALBEMARLE CORP | ALB | 11.88% |
| LG CHEM LTD | 051910KS | 5.30% |
| SAMSUNG SDI CO LTD | 006400KS | 5.27% |
| TESLA INC | TSLA | 5.17% |
| GANFENG LITHIUM CO LTD-A | 002460C2 | 5.14% |
| BYD CO LTD-H | 1211HK | 5.11% |
| PANASONIC CORP | 6752JP | 5.09% |
| QUIMICA Y-SP ADR | SQM | 4.58% |
| EVE ENERGY CO LTD-A | 300014C2 | 4.46% |
| CONTEMPORARY A-A | 300750C2 | 4.23% |
LIT has holdings in global companies spanning 11 countries. The countries with the highest % of net assets are China (43.3%), United States (22.0%), and South Korea (11.7%). This is an additional benefit of LIT, the ability to buy into companies which trade in foreign markets that are not readily accessible in the US markets.
For example, if you are an investor who would like to add LG Chem, Samsung, or Panasonic (all of which help support Tesla’s battery production) to your portfolio, but do not feel comfortable or have access to trading in the Korean Exchange (KRX) or or Tokyo Japan exchange (JP) then purchasing LIT provides an option to buy into these stocks.
More About LIT
Unlike some other EV investment options which have only been around a few years (or even a few months), LIT is a well established ETF that originated back in 2010.
Over the past 52 weeks, LIT has more than doubled in value from ~$25/share to over ~$50/share.
This increase is heavily tied to all of the positive recent news regarding Tesla including the announcement of their new 4680 battery cells, production ramp up and sale of vehicles in the China market via Giga Shanghai, progress on their new manufacturing facilities Giga Berlin & Giga Texas, and most recently their inclusion into the S&P500.
LIT has holdings in 4 key market sectors: Materials, Industrials, Information Technology, and Consumer Discretionary.
While LIT typically trends with Tesla, if offers investors additional gain potential as automotive companies begin to offer more and more electric vehicle options requiring lithium ion battery cells.
The electric vehicle industry has shown that it is here to stay as demand in EVs continues to increase with a rising wave of green technology. And as the saying goes, a rising tide lifts all boats….or in this case cars!
Summary
There are other great EV investment options out there other than just TSLA! The LIT ETF offers a great way to diversify your EV portfolio by investing in companies that support the production of lithium ion battery cells that power the growing number of electric vehicles offered by automotive companies.
Are you ready to get LIT? Leave a comment below and join the conversation!
