Can you buy a lithium ETF on the ASX today?

Can you get a lithium ETF on the ASX?

| More on:
green lithium battery being held by person

Image source: Getty Images

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:

  1. BYD Co Ltd with a portfolio weighting of 5.3%
  2. Pilbara Minerals Ltd (ASX: PLS) with a weighting of 5.2%
  3. Livent Corp (NYSE: LTHM) with a weighting of 4.1%
  4. SolarEdge Technologies Inc (NASDAQ: SEDG) with a weighting of 3.9%
  5. Samsung Electronics Co Ltd (KRX: 005930)with a weighting of 3.5%
  6. Bollore SE (OTCMKTS: BOLL) with a weighting of 3.4%
  7. Eos Energy Enterprises Inc (NASDAQ: EOSE) with a weighting of 3.4%
  8. Tesla Inc (NASDAQ: TSLA) with a weighting of 3.3%
  9. ABB Ltd (NYSE: ABB) with a weighting of 3.3%
  10. 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.

Should you invest $1,000 in ETFS Battery Tech & Lithium ETF right now?

Before you consider ETFS Battery Tech & Lithium ETF, you'll want to hear this.

Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now... and ETFS Battery Tech & Lithium ETF wasn't one of them.

The online investing service he’s run for nearly a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.

*Returns as of August 16th 2021

Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on ETFs