In this article we discuss the 10 best battery ETFs to buy now.
The election of Joe Biden to the United States presidency has boosted clean energy stocks and only a few months into the new administration, the White House has already signaled a willingness to extend the tax breaks afforded to firms working in the electric vehicle industry for another five years. Some evidence of the growth potential of clean energy stocks is evidenced by the record Tesla, Inc. (NASDAQ: TSLA) rally over the past few months. Although the share price of the EV maker has fallen since, it still has a lot of room to run as demand increases in emerging markets.
Some of the remarkable growth of Tesla, Inc. (NASDAQ: TSLA) is attributable to new battery technology that increases the efficiency of clean energy vehicles and decreases the overall cost, thereby making sales and mass production easier. Some stocks to watch out for in this regard include NIO Inc. (NYSE: NIO) and Plug Power Inc. (NASDAQ: PLUG). The former is often referred to as the Tesla of the Chinese market, where EV demand is exploding, while the latter is marketing revolutionary new fuel cell technology to power water transport.
Even though the battery energy market looks set to register solid growth numbers this year, investors who want to shield themselves from the price volatility associated with high growth stocks like Tesla, Inc. (NASDAQ: TSLA), NIO Inc. (NYSE: NIO), and Plug Power Inc. (NASDAQ: PLUG) often minimize risk by investing in exchange-traded funds (ETFs) that offer exposure to the electric vehicle and battery industry. Some of these funds, like the ARK Innovation ETF, have returned more than 152% to investors over the past year.
These ETFs offer investors exposure to not just electric vehicle and energy storage firms, but also companies working in the materials and mining segments which are involved in the production of high-end electric cars or battery storage solutions. The exact weighting of the different sectors varies with each fund, and plays a huge part in determining the overall returns. For example, the battery ETFs that held Tesla, Inc. (NASDAQ: TSLA), NIO Inc. (NYSE: NIO), and Plug Power Inc. (NASDAQ: PLUG) over the past year have offered record returns.
The tech-led disruption has been a source of fierce contention in the wider market in recent years as it alters the fundamental business model of many sectors. The entire hedge fund industry is feeling the reverberations of the changing financial landscape. Its reputation has been tarnished in the last decade, during which its hedged returns couldn’t keep up with the unhedged returns of the market indices. On the other hand, Insider Monkey’s research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 124 percentage points since March 2017. Between March 2017 and February 26th 2021 our monthly newsletter’s stock picks returned 197.2%, vs. 72.4% for the SPY. Our stock picks outperformed the market by more than 124 percentage points (see the details here). We were also able to identify in advance a select group of hedge fund holdings that significantly underperformed the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 13% through November 16th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to. You can subscribe to our free newsletter on our homepage to receive our stories in your inbox.
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With this context in mind, here is our list of the 10 best battery ETFs to buy now.
Best Battery ETFs to Buy Now
10. Global X Autonomous & Electric Vehicles ETF (NASDAQ: DRIV)
Global X Autonomous & Electric Vehicles ETF (NASDAQ: DRIV) is a non-diversified exchange traded fund that tracks the investment returns of the Solactive Autonomous & Electric Vehicles Index which comprises companies that are publicly traded and involved in the development of electric vehicles, electric vehicle components, electric vehicle materials, autonomous driving products, as well as network connected devices.
Global X Autonomous & Electric Vehicles ETF (NASDAQ: DRIV) has more than $900 million in net assets under management. It has a year-to-date daily total return of 17.4% and a net expense ratio of 0.68%. The 52-week price range of the ETF lies between $13 and $28.
One of the top holdings of the firm is Alphabet Inc. (NASDAQ: GOOG), the California-based technology company pursuing autonomous vehicle technology.
At the end of the first quarter of 2021, 159 hedge funds in the database of Insider Monkey held stakes worth $29 billion in Alphabet Inc. (NASDAQ: GOOG), up from 157 in the previous quarter worth $20 billion.
Polen Global Growth Fund, in its Q1 2021 investor letter, mentioned Alphabet Inc. (NASDAQ: GOOG). Here is what Polen Global Growth Fund has to say about Alphabet in its letter:
“For our top contributors, each generated strong returns for different, but fundamentally based reasons, in our opinion. Alphabet saw renewed strength recently as advertisers generally resumed spending after a short pause during the pandemic.
Alphabet experienced some challenging quarters in 2020 as many companies paused their advertising spend. But, the business bounced back recently, spurring a strong recovery in the company’s share price. Even during such a challenging period, the company still compounded revenue at 14% in constant currency for 2020.
This is partly due to Alphabet’s multiple growth engines. For example, while its search business was negative one quarter and only grew by 6% during another, YouTube ads and Google Cloud Platform (GCP) grew at over 30% and 46% during the quarter, respectively. YouTube and GCP combined now contribute over 50% of the company’s growth, which we believe is a testament to a strong culture of innovation, a long-term mindset, and prudent capital allocation. With search bouncing back this most recent quarter–growing 17% –we believe that Alphabet continues to be well-positioned to durably compound earnings at or above 15% for many years to come. It remains one of our largest positions.
9. SPDR S&P Kensho Smart Mobility ETF (NYSE: HAIL)
SPDR S&P Kensho Smart Mobility ETF (NYSE: HAIL) is a non-diversified exchange traded fund that tracks the investment results of the S&P Kensho Smart Transportation Index which is an index comprising companies that are designated as involved in the smart transportation business according to the underlying index maker. as outlined by the Industry Classification Benchmark. The fund invests at least 80% of total assets in stocks of the index.
SPDR S&P Kensho Smart Mobility ETF (NYSE: HAIL) has more than $246 million in net assets under management and the year-to-date daily total return of the fund is a healthy 14.9%. The price of the fund has hovered between $28 and $71 over the past 52 weeks.
A premier holding of the fund is General Motors Company (NYSE: GM), the Michigan-based automotive manufacturer that is investing heavily into new energy vehicles.
Out of the hedge funds being tracked by Insider Monkey, Nebraska-based investment firm Berkshire Hathaway is a leading shareholder in General Motors Company (NYSE: GM) with 67 million shares worth more than $3.8 billion.
Junto Investments, in its Q4 2020 investor letter, mentioned General Motors Company (NYSE: GM). Here is what the fund has to say about General Motors Company in its letter:
“General Motors was the biggest gainer. We managed to buy it at a screamingly cheap price in the middle of March. A lot of interesting news has emerged about GM recently, including the new electric product delivery system BrightDrop and GM Cruise’s team-up with Microsoft Azure to commercialize self-driving cars in 2021. GM’s intrinsic value is crystallizing and the company is worth a whole lot more than is still reflected in the market.”
8. VanEck Vectors Rare Earth/Strategic Metals ETF (NYSE: REMX)
VanEck Vectors Rare Earth/Strategic Metals ETF (NYSE: REMX) is an exchange traded fund that tracks the investment results of the MVIS Global Rare Earth/Strategic Metals Index which comprises companies that are engaged in producing, refining and recycling of rare earth and strategic metals used in batteries around the world. It is a non-diversified fund that invests at least 80% of assets in equities on the underlying index.
VanEck Vectors Rare Earth/Strategic Metals ETF (NYSE: REMX) has more than $679 million in net assets under management. The year-to-date daily total return of the fund is 30.5%. The net expense ratio is 0.59% and the 52-week price range of the fund lies between $33 and $93.
A top holding of the firm, in which it has invested 7.44% of total assets under management, is Galaxy Resources Limited (FRA: LK9.F), the Australian rare earth mining company. Galaxy Resources Limited (FRA: LK9.F) is involved in the production of lithium and the exploration of other minerals in Australia, Canada, and Argentina.
Like General Motors Company (NYSE: GM), Alphabet Inc. (NASDAQ: GOOG), Tesla, Inc. (NASDAQ: TSLA), NIO Inc. (NYSE: NIO) and Plug Power Inc. (NASDAQ: PLUG), Galaxy Resources is one of the best stocks to buy for long-term gains.
7. Global X Lithium & Battery Tech ETF (NYSE: LIT)
Global X Lithium & Battery Tech ETF (NYSE: LIT) is an exchange traded fund that tracks the investment results of the Solactive Global Lithium Index which comprises companies that work in the global lithium industry. It is a non diversified fund that invests at least 80% of total assets in securities of the underlying index.
Global X Lithium & Battery Tech ETF (NYSE: LIT) has more than $3 billion in net assets under management with a year-to-date daily total return of 10%. The net expense ratio is 0.75%, with the 52-week price range of $29-$74.
A premier holding of the fund is Albemarle Corporation (NYSE: ALB), the North Carolina-based specialty chemicals firm.
At the end of the first quarter of 2021, 31 hedge funds in the database of Insider Monkey held stakes worth $262 million in Albemarle Corporation (NYSE: ALB), up from 21 in the previous quarter worth $126 million. Like Quanta Services, Inc. (NYSE: PWR), General Motors Company (NYSE: GM), Alphabet Inc. (NASDAQ: GOOG), Tesla, Inc. (NASDAQ: TSLA), NIO Inc. (NYSE: NIO) and Plug Power Inc. (NASDAQ: PLUG), Albemarle is one of the best stocks to buy to profit from the EV, battery and broader tech growth in the world.
6. First Trust NASDAQ Clean Edge Smart Grid Infrastructure Index Fund (NASDAQ: GRID)
First Trust NASDAQ Clean Edge Smart Grid Infrastructure Index Fund (NASDAQ: GRID) is an exchange traded fund tracking the investment results of NASDAQ OMX Clean Edge Smart Grid Infrastructure Index. It is a non-diversified fund that invests in at least 90% of the underlying stocks in the index.
First Trust NASDAQ Clean Edge Smart Grid Infrastructure Index Fund (NASDAQ: GRID) has more than $373 million in net assets under management with a year-to-date total daily return of 12.9%. The net expense ratio of the fund is 0.7% with a 52-week price range of $52-$91.
One of the top holdings of the fund is Quanta Services, Inc. (NYSE: PWR), the Texas-based power infrastructure company.
At the end of the first quarter of 2021, 33 hedge funds in the database of Insider Monkey held stakes worth $897 million in Quanta Services, Inc. (NYSE: PWR), the same as in the previous quarter worth $972 million. Like General Motors Company (NYSE: GM), Alphabet Inc. (NASDAQ: GOOG), Tesla, Inc. (NASDAQ: TSLA), NIO Inc. (NYSE: NIO) and Plug Power Inc. (NASDAQ: PLUG), PWR is one of the best stocks to buy for long-term gains.
5. First Trust NASDAQ Clean Edge Green Energy Index Fund (NASDAQ: QCLN)
First Trust NASDAQ Clean Edge Green Energy Index Fund (NASDAQ: QCLN) is an exchange traded fund that tracks the investment results of the NASDAQ Clean Edge Green Energy Index comprising US-based firms working in the clean energy business. The fund tracks the performance of stocks and invests at least 90% of total assets in the stocks on the index.
First Trust NASDAQ Clean Edge Green Energy Index Fund (NASDAQ: QCLN) has close to $2.7 billion in net assets under management. It has a year-to-date daily total return of -9.95% with a net expense ratio of 0.60%. Over the past 52 weeks, the price of the fund has touched a low of $27 and a high of $90.
One of the top holdings of the fund, in which it has invested close to 7.5% of assets under management is Chinese automaker NIO Inc. (NYSE: NIO).
At the end of the first quarter of 2021, 28 hedge funds in the database of Insider Monkey held stakes worth $1.3 billion in NIO Inc. (NYSE: NIO), down from 34 in the previous quarter worth $2.6 billion.
4. ETFS Battery Tech and Lithium (ASX: ACDC.AX)
ETFS Battery Tech and Lithium (ASX: ACDC.AX) is an exchange traded fund that tracks the performance of the Solactive Battery Value-Chain Index which comprises companies working in the battery energy storage and mining sector. It is a non-diversified fund that employs a replication strategy to invest in stocks on the underlying index.
ETFS Battery Tech and Lithium (ASX: ACDC.AX) has more than $205 million in net assets under management with a year-to-date daily total return of 9.7%. The net expense ratio is 0.82% and the 52-week price range lies between $52 and $94.
One of the flagship holdings of the fund is General Electric Company (NYSE: GE), the Boston-based firm with stakes in the electronics, energy, and health businesses.
At the end of the first quarter of 2021, 68 hedge funds in the database of Insider Monkey held stakes worth $6.1 billion in General Electric Company (NYSE: GE), down from 69 in the previous quarter worth $5.6 billion.
In its Q1 2021 investor letter, Vulcan Value Partners, an asset management firm, highlighted a few stocks and General Electric Company (NYSE: GE) was one of them. Here is what the fund said:
“General Electric is outperforming our expectations for 2021 as the economic recovery is occurring faster than expected. We are particularly pleased with its free cash flow generation. We are happy to own it in our portfolio.”
3. Amplify Lithium & Battery Technology ETF (NYSE: BATT)
Amplify Lithium & Battery Technology ETF (NYSE: BATT) is an exchange traded fund that tracks the investment results of the EQM Lithium & Battery Technology Index which comprises companies that derive revenue from lithium battery technology. It is a non-diversified fund that invests at least 80% of total assets in holdings on the index.
Amplify Lithium & Battery Technology ETF (NYSE: BATT) has more than $162 million in net assets under management with a year-to-date daily total return of -5.75%. The net expense ratio for the fund is 0.59%.
One of the premier holdings of the firm is Tesla, Inc. (NASDAQ: TSLA), the California-based electric carmaker.
Out of the hedge funds being tracked by Insider Monkey, Chicago-based firm Citadel Investment Group is a leading shareholder in Tesla, Inc. (NASDAQ: TSLA) with 24 million shares worth more than $16 billion.
Here is what Baron Partners Fund has to say about Tesla, Inc. (NASDAQ: TSLA) in its Q1 2021 investor letter:
“Tesla, Inc. designs, manufactures, and sells fully electric vehicles, solar products, energy storage solutions, and battery cells. The stock fell during the quarter as a result of general market dynamics and a potential production slowdown due to parts shortages. A refreshed S/X and China Model Y ramp could also have a negative impact on margins in early 2021. We anticipate strong growth and improved margins driven by new production capacity, manufacturing efficiencies, localization of its manufacturing and supply chain, and maturation of Tesla’s full self-driving technology.”
2. ARK Autonomous Technology & Robotics ETF (BATS: ARKQ)
ARK Autonomous Technology & Robotics ETF (BATS: ARKQ) is an exchange traded fund that invests in companies working on autonomous technologies and robotics across the world. The fund invests at least 80% of total assets in these firms and seeks long-term capital growth through this strategy.
ARK Autonomous Technology & Robotics ETF (BATS: ARKQ) has more than $3.2 billion in net assets under management with a year-to-date daily total return of 7.8%. The net expense ratio for the fund is 0.75%.
A flagship holding of the fund, in which it has invested 3.64% of total assets under management, is NVIDIA Corporation (NASDAQ: NVDA), the California-based visual computing firm.
At the end of the first quarter of 2021, 80 hedge funds in the database of Insider Monkey held stakes worth $6.2 billion in NVIDIA Corporation (NASDAQ: NVDA), down from 88 in the preceding quarter worth $8.6 billion.
In its Q1 2021 investor letter, Vulcan Value Partners, an asset management firm, highlighted a few stocks and NVIDIA Corporation (NASDAQ: NVDA) was one of them. Here is what the fund said:
“NVIDIA Corp. is the dominant supplier of Graphics Processing Units (GPUs) worldwide. NVIDIA’s GPUs are at the intersection of a number of important computing trends including the movement to the Cloud, artificial intelligence, autonomous vehicles, edge computing, gaming, and more. We previously owned NVIDIA and sold it in the third quarter of 2020 as the price to value gap closed and our margin of safety was reduced. As with all our MVP companies, we continued to follow NVIDIA closely. Since that time, NVIDIA reported excellent results and its value has compounded rapidly. The technology selloff at the beginning of the year negatively affected the stock price while our estimate of NVIDIA’s value per share increased. This happy combination of events created a margin of safety and an opportunity to once again add NVIDIA to the portfolio.”
1. WisdomTree Battery Solutions UCITS ETF – USD Acc (LSE: CHRG.L)
WisdomTree Battery Solutions UCITS ETF – USD Acc (LSE: CHRG.L) is an exchange traded fund that tracks the investment results of the WisdomTree Battery Solutions Index which comprises firms working in the battery technology sector.
WisdomTree Battery Solutions UCITS ETF – USD Acc (LSE: CHRG.L) has over $18 million in net assets under management with a net expense ratio of 0.40%. The 52-week price range of the fund is between $27 and $3,425.
One of the premier holdings of the fund is Plug Power Inc. (NASDAQ: PLUG), a company that markets usage of hydrogen fuel cells in electric vehicles and ships.
Out of the hedge funds being tracked by Insider Monkey, New York-based investment firm DE Shaw is a leading shareholder in Plug Power Inc. (NASDAQ: PLUG) with 12 million shares worth more than $433 million.
In its Q2 2020 investor letter, Massif Capital, an asset management firm, highlighted a few stocks and Plug Power Inc. (NASDAQ: PLUG) was one of them. Here is what the fund said:
“We also closed our short position in Plug Power this quarter as the market was subsumed with enthusiasm over their recent acquisitions, resulting in an almost 80% rally in the stock over ten trading days. Our decision to exit was painful at the time as we were forced to reconcile with a collective exuberance that was (and is, in our opinion) not grounded reality. In hindsight, it was the correct decision as we avoided most of its recent vertical trajectory.”
You can also take a peek at 10 Blue Chip Dividend Stocks Hedge Funds Are Buying and 14 Best European Dividend Stocks To Buy.
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Disclosure: None. 10 Best Battery ETFs to Buy Now is originally published on Insider Monkey.
