The automobile industry is gearing up for massive changes in the coming decades. On one hand, there is a lot to be excited about in the fast-growing electric vehicle market.
Allied Market Research recently projected that the global electric vehicle market will reach $567 billion by 2025. This is compared to a valuation of $118 billion in 2017. If this projection is accurate it would represent a CAGR of 22.3% over this time span.
EVs are not the only change agent in this sector. Investors should also prepare for the proliferation of automated vehicles, although development in this area has been slow. A recent report from ResearchAndMarkets forecast that the global autonomous vehicle market will reach $615 billion by 2026. This would represent a CAGR of 41.5% from 2017 to 2026.
The Evolve Automobile Innovation Index Fund (TSX:CARS) offers exposure to both of these high-growth subsectors. The ETF primarily invests in companies that are directly or indirectly involved in developing electric drivetrains, autonomous driving or network connected services for automobiles. Shares of the ETF have climbed 22.5% in 2019 after falling 18% in 2018.
Some of the top holdings in the fund include Ambarella, a California-based fabless semiconductor design company, Cirrus Logic, which operates in the same space, and Visteon, a global automotive electronics supplier. Investors who are seeking exposure to this high-growth sector should consider this ETF in late September.
