2021 has seen investors chasing a few hot trends. Over the year to date, we have had spiking interest in a range of ASX shares, including renewable energy companies and uranium shares. But one of the hottest and most consistent areas of interest are lithium shares.
2021 has been quite a year for the lithium sector. We have seen companies like Pilbara Minerals Ltd (ASX: PLS) and Orocobre Limited (ASX: ORE) explode in value. Pilbara is currently up more than 135% year to date, and Orocobre is up more than 91%.
So with investors scrambling to get a foothold in the promising lithium space, there might be a few investors wondering if they can look to an exchange-traded fund (ETF) instead. ETFs are used more and more these days for sector-specific investments after all. The ASX boasts ETFs that track the gold sector, oil futures and even the price of platinum. So what are investors’ options when it comes to lithium?
Well, the ASX does have one dedicated lithium ETF. That would be the ETFS Battery Tech & Lithium ETF (ASX: ACDC).
ACDC ETF delivers on lithium
The rather aptly named ACDC ETF is a relatively new one, having started life back in August 2018. Since then, it has managed to book an average annual return of 27.7%.
It’s also managed to average 27.5% per annum over the past 3 years, and an eye-watering 65.5% over just the past 12 months.
So what does this ETF invest in? Well, according to the provider, ACDC “offers investors exposure to the energy storage and production megatrend, including companies involved in the supply chain and production for battery technology and lithium mining”.
Looking at its current portfolio, we can see that this ETF is tilted towards the United States, Japan and South Korea. 22.4% of its holdings are domiciled in the US, with another 21.7% in Japan and 11.9% in South Korea. Australia is next up with an 8.3% allocation.
We recently went through ACDC’s holdings here on the Fool. But if you’re up for a refresher, here’s how the current ACDC portfolio stands, 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 (KRX: 005930)with a weighting of 3.5%
- Bollore SE (OTCMKTS: BOLL) 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%
However, ACDC is not ASX investors’ only option, if one is willing to look beyond the ASX boards. My Fool colleague Tony recently discussed a US-based lithium ETF as well – the Global X Lithium & Battery Tech ETF (NYSEARCA: LIT). It seems investors have a few options if they want to pursue the lithium space for their portfolios today.