Introduction
Electric vehicles are considered one of the exciting technologies that have become more common in recent years. With increasing concern about climate change, purchasing an electric vehicle has become one way for consumers to reduce their emissions, which may mean that this market is poised for growth. If you want to bet on buying electric cars, electric vehicle ETFs are one way you can do this.
Best Electric Vehicle ETFs
Here is a list of the best electric vehicle ETFs that investors can consider, presented in no particular order and based on fund costs, historical performance, ability to track the electric vehicle market, liquidity, and diversification among different types of businesses.
Global X Lithium and Battery Tech ETF (LIT)
This fund not only focuses on electric vehicle manufacturers but also on companies involved in lithium battery production and companies in the supply chain like miners and refiners. The majority of electric vehicles currently depend on lithium-ion batteries, making this fund a means for investors to bet on the growth of electric vehicles while gaining exposure to other battery-dependent industries. The fund has an expense ratio similar to others on the list, at 0.75%, which equals $7.50 for every $1,000 invested, and it has returned 38% over the past three years through September 30, 2021. Major holdings in the fund include Albemarle, Tesla, and EVE Energy Co.
KraneShares Electric Vehicles and Future Mobility ETF (KARS)
If you want to focus more on electric vehicles, the KraneShares Electric Vehicles & Future Mobility ETF (KARS) may be the right choice for you. This fund invests in electric vehicle manufacturers and companies that build parts for those vehicles. It also holds some shares in companies involved in the future of transportation, such as autonomous vehicles and fuel cell manufacturing. The fund has around $326.1 million in investments and does not have the liquidity that some other ETFs on the list possess, which have seen investments in the billions. However, it has achieved a 40% return over the past three years (as of October 31, 2021) and has an expense ratio of 0.70% ($7 for every $1,000 invested), making it a good option for investors who want to focus more on automotive companies. Some notable companies among the top holdings in the fund include Tesla, General Motors, and Ford.
iShares Self-Driving EV and Tech ETF (IDRV)
The iShares Self-Driving EV and Tech ETF (IDRV) is a smaller fund, having begun in April 2019, and is an option for those looking to focus on various innovations in the automotive industry. The fund focuses on both electric vehicles and self-driving car technology, aiming for “long-term growth by reaching companies that can shape the future of the global economy.” This fund is the cheapest on the list, with an expense ratio of 0.47% ($4.70 for every $1,000 invested), and it has returned 31% since its inception (as of September 30, 2021). In addition to companies like Tesla, IDRV also includes non-automotive-related companies such as Qualcomm, Apple, and Intel among its top holdings.
ARK Innovation ETF (ARKK)
The ARK Innovation ETF (ARKK) is the largest fund on the list, but it is the least focused. However, that doesn’t mean it’s a bad option for those looking to invest in electric vehicles. The fund invests in companies involved in “various innovation,” which means companies that enable new products and services or change how the world works. The fund has an expense ratio of 0.75% ($7.50 for every $1,000 invested) and has achieved a 35% return over the past three years ending September 30, 2021.
Advantages
Disadvantages of Investing in Electric Vehicle ETFs
Advantages
– The market share of electric vehicles is expected to increase.
– Investment in a variety of industries related to electric vehicles.
Disadvantages
– Electric vehicle sales may not be profitable.
– There is no specialized fund that focuses solely on automotive companies.
Historical Performance
Historically, electric vehicles have not generated significant profits for manufacturers, but they have steadily gained popularity. In 2020, consumers registered around 3 million new electric vehicles worldwide.
Source: https://www.thebalancemoney.com/best-electric-vehicle-etfs-5209486
}
.lwrp .lwrp-list-item .lwrp-list-link .lwrp-list-link-title-text,
.lwrp .lwrp-list-item .lwrp-list-no-posts-message{
}@media screen and (max-width: 480px) {
.lwrp.link-whisper-related-posts{
}
.lwrp .lwrp-title{
}.lwrp .lwrp-description{
}
.lwrp .lwrp-list-multi-container{
flex-direction: column;
}
.lwrp .lwrp-list-multi-container ul.lwrp-list{
margin-top: 0px;
margin-bottom: 0px;
padding-top: 0px;
padding-bottom: 0px;
}
.lwrp .lwrp-list-double,
.lwrp .lwrp-list-triple{
width: 100%;
}
.lwrp .lwrp-list-row-container{
justify-content: initial;
flex-direction: column;
}
.lwrp .lwrp-list-row-container .lwrp-list-item{
width: 100%;
}
.lwrp .lwrp-list-item:not(.lwrp-no-posts-message-item){
}
.lwrp .lwrp-list-item .lwrp-list-link .lwrp-list-link-title-text,
.lwrp .lwrp-list-item .lwrp-list-no-posts-message{
};
}
Leave a Reply