Why is the ETFS Battery Tech & Lithium ETF (ASX:ACDC) rising in value today?

This lithium-based ETF is having a great day today…

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The S&P/ASX 200 Index (ASX: XJO) is having another decent start to the day’s trading this Tuesday. At the time of writing, the ASX 200 is up a reasonable 0.38% to 7,469 points. But one ASX exchange-traded fund (ETF) is doing a whole lot better. That would be the ETFS Battery Tech & Lithium ETF (ASX: ACDC).

This ETF invests in “the energy storage and production megatrend, including companies involved in the supply chain and production for battery technology and lithium mining”.

And it’s doing well today. At the time of writing, ACDC units are currently up a solid 1.53% at $93.40 each. That’s a gain more than triple what the ASX 200 has given out.

So, let’s take a look at why this ETF might be jumping in value today.

What could be driving the ACDC performance today?

According to ETFS, ACDC’s largest underlying holding (as of 30 September) was Chinese electric vehicle and battery manufacturer BYD Co Ltd (OTCM: BYDDF), with a 5% weighting in the ETF.

Its second-largest holding is Pilbara Minerals Ltd (ASX: PLS), with a 4.7% weighting. Its third-largest stock was Livent Corp (NYSE: LTHM), with a 3.9% weighting.

Why is this relevant? Well, because last night (our time), BYD stock was up a healthy 5.38% to US$40.15 a share. Livent Corp shares also had a strong day, rising 2.34% to US$25.80 a share. And today on the ASX boards, Pilbara Minerals shares are presently up a very pleasing 6.7% at the time of writing to $2.23 a share.

So, we have ACDC’s three largest holdings all rallying between 2% and 6.7% over the past 24 hours. This is probably behind why this ETF is performing strongly on the ASX today.

But it hasn’t been all plain sailing for ACDC investors. While this ETF is having a strong day today, it’s still in the red by 0.7% over the past month, and up just 0.4% over the past 6 months.

In contrast, the ASX 200 is up 1.6% over the past month and up more than 6% over the past 6 months. Saying that, ACDC has managed to gain 43% over the past year, while the ASX 200 has only risen 21.34% over the same period.

The ETFS Battery Tech & Lithium ETF charges a management fee of 0.69% per annum.

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

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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.

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