Lithium and batteries have been hot trends on the ASX boards for a few years now. As a perceived 'growth area' for the world economy over the coming decades, investors have been very excited to try and find the renewable energy powerhouses of tomorrow and ride the wave to a new electric future. One ASX exchange-traded fund (ETF) that offers investors exposure to this space is the ETFS Battery Tech & Lithium ETF (ASX: ACDC).
This ETF has been listed on the ASX since 2018. Since that date, it has delivered some impressive results. ACDC has returned an average of 27.7% per annum since its inception. That includes an average of 27.5% per annum over the past 3 years, as well as an incredible 65.5% over just the past year alone.
So how does this ETF manage these impressive numbers? Well, let's dig a little deeper into the kinds of companies that ACDC invests in.
According to ETFS' latest data (as of 31 August), this ETF has a total of $370.48 million in funds under management. It is invested in a basket of 32 shares across various counties of the world. Its largest exposure is to the United States at 22.4%, followed by Japan at 21.7% and South Korea at 11.9%. Australia is in fourth place with 8.3%.
What is the ETFS Battery Tech & Lithium ETF invested in right now?
So let's go through this ETF's top 10 investments as of 31 August:
- BYD Co Ltd with a portfolio weighting of 5.3%
- Pilbara Minerals Ltd (ASX: PLS) with a weighting of 5.2%
- Livent Corp (NYSE: LTHM) with a weighting of 4.1%
- SolarEdge Technologies Inc (NASDAQ: SEDG) with a weighting of 3.9%
- Samsung Electronics Co Ltd with a weighting of 3.5%
- Bollore SE with a weighting of 3.4%
- Eos Energy Enterprises Inc (NASDAQ: EOSE) with a weighting of 3.4%
- Tesla Inc (NASDAQ: TSLA) with a weighting of 3.3%
- ABB Ltd (NYSE: ABB) with a weighting of 3.3%
- Minerals Resources Limited (ASX: MIN) with a weighting of 3.1%
So a very mixed bag there. You have electric vehicle and battery manufacturers like Tesla and BYD, raw lithium producers like Pilbara Minerals and Mineral Resources, and solar energy companies like SolarEdge.
Minerals Resources and Pilbara have gained roughly 86% and 500% in value over the past 12 months, respectively. Livent Corp has managed a return of 183% over the past year too. When we look at numbers like these, we can start to understand how this ETF has delivered such impressive returns over the past year and beyond.
BYD is up 334% over the past 5 years, and Tesla is up an incredible 1680% – no doubt helping ACDC's longer-dated performance metrics.
The ETFS Battery Tech & Lithium ETF charges an annual management fee of 0.69%.
