Is This EV-Dependent ETF Worth Picking Up?

The proliferation of electric vehicles has become an obsession in the automotive sector. Most of the top automobile companies are rolling out new EVs starting in the next decade. These will be marketed to a broader range of consumers.

The lithium-ion battery is the most widely-used battery for the most recent group of EVs in development. New EVs are using updated variations on lithium-ion chemistry in order to increase the traditionally short life cycles of lithium-ion batteries.

The use of these batteries and the growth trajectory of the EV market has led to an explosion in the interest of lithium production.

The Global X Lithium & Battery Tech (NYSE:LIT) seeks to provide results that correspond to the price and yield performance of the Solactive Global Lithium Index. Shares of the ETF have climbed 3% in 2019 as of close on May 2.

It is down 15.7% from the prior year as sentiment has soured on the lithium market in 2018.

Some of the top holdings in the ETF include FMC Corp., an American chemical manufacturing company with a dedicated lithium division, Albemarle Corporation, another specialty chemical manufacturing company which produces lithium products, among others. Tesla is also squeezed into the top ten holdings at a 4.5% weighting.

Lithium demand will increase steadily into the next decade and prices are projected to stabilize by industry experts. This ETF is worth snagging for investors who want exposure to this crucial market.