Electric vehicles (EVs) are expected to eventually dominate the automotive market, thanks to favorable government policies worldwide amid the growing climate change concerns. As a result, the demand for EV charging solutions is also expected to rise significantly.
President Biden’s bipartisan infrastructure plan includes significant spending for the EV charging industry. He would like to see 500,000 EV charging stations built by 2030. According to a Technavio report, the EV charging station market is expected to grow at a 31% CAGR between 2021 - 2025.
Because it’s challenging to select the best stock in the crowded EV charging space, investors looking to capitalize on the industry’s growth in a less risky way could bet on quality ETFs exposed to EV charging stocks. Examples are Global X Lithium & Battery Tech ETF (LIT) and Amplify Lithium & Battery Technology ETF (BATT), which are rated A (which translates to Strong Buy) in our proprietary POWR Ratings system. So, we think these ETFs are worth considering for one’s portfolio.
Click here to checkout our Electric Vehicle Industry Report for 2021
Global X Lithium & Battery Tech ETF (LIT)
Launched and managed by Global X Management Company LLC, LIT invests in the stocks of companies operating across materials, metals and mining, diversified metals and mining, and diversified metal ores sectors. It seeks to track the performance of the Solactive Global Lithium Index by using a full replication technique.
With $4.65 billion in AUM, LIT’s top holding is Albemarle Corporation (ALB), which has a 14.07% weighting in the fund, followed by Yunnan Energy New Material Co., Ltd. at 6.96% and Ganfeng Lithium Co., Ltd. at 6.49%. It has an expense ratio of 0.75%, versus 0.62% category average.
LIT pays a $0.12 annual dividend, which yields 0.14% at the prevailing share price. The ETF’s average four-year dividend yield stands at 2.31%. LIT has gained 125.7% over the past year and nearly 77.5% over the past nine months.
LIT’s POWR Ratings are consistent with its growth outlook. It has an overall A rating, which equates to Strong Buy in our proprietary rating system. In addition, it has an A grade for Buy & Hold, Trade, and Peer.
LIT is ranked #3 of 112 ETFs in the A-rated Commodity ETFs group. Click here to see all the LIT ratings.
Amplify Lithium & Battery Technology ETF (BATT)
BATT is an exchange-traded fund launched and managed by Amplify Investments LLC. The fund invests in companies that operate across the development, production, and use of lithium battery technology sectors. In addition, it seeks to track the performance of the EQM Lithium & Battery Technology Index.
Contemporary Amperex Technology Co., Ltd. has a 7.91% weighting in the fund as its top holding, followed by Tesla Inc (TSLA) at 6.62%, and BYD Company Limited at 6.02%. BATT has $233.70 million in AUM. Its 0.59% expense ratio is lower than the 0.62% category average.
BATT pays $0.03 annually in dividends, which yields 0.18%. Its average four-year dividend yield stands at 1.47%. Over the past year, the fund has gained 74.4%. Also, it has gained 53.4% over the past nine months.
It’s no surprise that BATT has an overall A rating, which equates to Strong Buy in our proprietary rating system. In addition, it has an A grade for Trade, Buy & Hold, and Peer.
Click here to access all of BATT’s grades. BATT is ranked #25 in the same group.
Click here to checkout our Electric Vehicle Industry Report for 2021
LIT shares were trading at $86.57 per share on Thursday afternoon, up $0.08 (+0.09%). Year-to-date, LIT has gained 39.95%, versus a 19.60% rise in the benchmark S&P 500 index during the same period.
About the Author: Nimesh Jaiswal
Nimesh Jaiswal's fervent interest in analyzing and interpreting financial data led him to a career as a financial analyst and journalist. The importance of financial statements in driving a stock’s price is the key approach that he follows while advising investors in his articles.
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