The Global X Lithium & Battery Tech ETF (LIT) invests in the full lithium cycle, starting with mining and refining the metal, and then finishing with battery production, notes Jim Woods, growth investing expert and editor of The Deep Woods.
This exchange-traded fund gives broad exposure to the metal, while offering targeted, concentrated exposure tilted toward micro-cap stocks.
Good tracking of its underlying index tempers the fund’s variable spreads and high expense ratio. For investors looking for an ETF to gain exposure to the lithium niche, Global X Lithium & Battery Tech is the only game in town.
LIT is heavily weighted in Asia, with 43.3% of its net assets in China, 11.7% in Korea and 6.7% in Japan; 22% in the United States; 5.2% in Australia; and 4.8% in Chile. Its top three holdings include 12.27% in Albemarle Corp. (ALB); 5.36% in Ganfeng Lithium Co. (GNENF); and 5.35% in Tesla (TSLA).
The fund has amassed $1.42 billion in assets under management with 42 holdings and an average spread of 0.09%. Its expense ratio sits at 0.75%, which means it is relatively more expensive to hold in comparison to other exchange-traded funds. LIT currently trades with a 0.85% yield.
LIT tracks a market-cap-weighted index of global lithium miners and battery producers. The fund seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of the Solactive Global Lithium Index.
Two main reasons to invest in this Global X fund are thematic exposure and efficient access. The fund is a thematic play on lithium and battery technology, and it offers efficient access to a broad basket of companies involved in lithium mining, lithium refining and battery production.
However, I urge all interested investors to exercise their own due diligence to determine whether any stock or fund meets their own portfolio strategy and goals.
