While the basic fund provides broad exposure to the lithium sector, it also manages to provide targeted, concentrated exposure through a micro-cap tilt. LIT is a great choice for those seeking for a lithium ETF with a unique focus. Every year, the index is recreated and rebalanced.
Is the LIT ETF managed actively?
According to its prospectus, the Global X Lithium & Battery Tech ETF “invests in the whole lithium cycle, from mining and refining the metal to battery production.” It isn’t a fund that is actively managed. Rather, it tries to track the Solactive Global Lithium Index’s performance before fees and expenses. The expense ratio of the fund is 0.75 percent, which is rather low.
As of Nov. 25, the fund has 40 holdings and a net asset value of almost $1.3 billion. As of Oct. 31, China had 49 percent of the holdings in terms of dollar value, the United States had 21%, and South Korea had 11%. Other than the United States, no other country has more than 5% of total ownership. In recent years, China has made significant progress in the lithium and related businesses, as evidenced by this nation breakdown.
Is LIT under active management?
Because the LIT ETF is actively managed and constantly rebalanced, it provides investors with low risk and low effort exposure to the rapidly increasing lithium and battery market. The fund has rewarded early investors as demand for lithium has steadily increased to match the need for electric vehicles, with the ETF up over 100% in a year. Lithium demand is predicted to rise in the future, with over 200 million electric vehicles expected to be on the road by 2030. The ETF is highly-diversified in terms of stock allocation as well as geographically, since it selects the most promising companies from throughout the world. However, because of its substantial exposure to Chinese enterprises, it may be susceptible to regulatory scrutiny. In any case, the ETF could see additional upside in the long run, rewarding patient investors.
What kind of ETF has been lit?
The Global X Lithium & Battery Tech ETF (LIT) aims to produce investment outcomes that are broadly comparable to the Solactive Global Lithium Index’s price and yield performance before fees and expenses.
Tesla gets its lithium from where?
In a report on the Shenzhen Stock Exchange today, Ganfeng Lithium Co Ltd and its subsidiary GFL International Co Ltd stated that they had inked a three-year supply agreement with Tesla.
Ganfeng did not specify how much lithium they will deliver to Tesla, but they did say that the agreement will begin in 2022.
Tesla has become more involved in the raw material supply chain for battery cells in order to help hasten the transition to electric mobility.
Despite the fact that it has only recently begun manufacturing its own cells, the automaker has been securing supplies of lithium, nickel, cobalt, and other minerals for its battery cell suppliers.
Tesla began to sign contracts for off-take agreements with junior mining businesses hoping to create new mining projects that would improve the availability of some crucial materials for batteries, in addition to dealing with established mining corporations.
These contracts, on the other hand, are more volatile because the projects must make it to production and frequently meet obstacles.
A North Carolina lithium project with whom Tesla had a supply deal slipped behind schedule earlier this year.
However, as the world’s largest lithium producer, Ganfeng Lithium is a distinct animal.
For manufacturers aiming to create huge volumes of electric vehicles, securing long-term contracts with large producers like Ganfeng is critical.
As lithium prices rise, battery producers and automakers alike are scrambling to win contracts.
What is the finest Ark ETF?
ARKW comes out on top in every category. On a one-year basis, the deeper correction in ARKK has put it far behind both ARKW and ARKF, as well as behind ARKW over the longer period.
What is the difference between an active and a passive ETF?
- Over the last decade, ETFs have exploded in popularity, giving investors low-cost access to diversified holdings across a variety of indices, sectors, and asset classes.
- Buy-and-hold indexing methods that track a specific benchmark are common in passive ETFs.
- To outperform a benchmark, active ETFs employ one of several investment strategies. Active management is provided by passively holding an Active ETF.
- Passive ETFs are less expensive and more transparent than active ETFs, but they lack alpha potential.
