Are lithium ETFs suitable for long term investments

Best Lithium ETF UK 2021 List

Below, we review each one of the most popular lithium ETFs in the market,however, if you want to get into the game quickly, here’s a quick overview ofthe best lithium ETFs for UK investors to consider. 1. The Global X Lithium & Battery Tech ETF (NASDAQ: LIT) – Overall Best Lithium ETF UK – Invest Now 2. ETFs Battery Tech & Lithium ETF (ASX: ACDC.AX) – Best Lithium ETF for Energy Investment – Invest Now 3. Amplify Lithium & Battery Technology ETF (NYSE: BATT) – Best High Rating Lithium ETF – Invest Now 4. First Trust Nasdaq Clean Edge Smart Green Energy ETF (NASDAQ: QCLN) – Best Green Energy ETF 5. WisdomTree Battery Solutions UCITS ETF USD Acc (LSE: CHRG.L) – Lithium ETF with the Highest Dividend Yield

Best Lithium ETFs UK Reviewed

As you can see from our list above, there’s a variety of ETFs that allow youto get exposure to lithium-related stocks. Each ETF has its own specificconsiderations and targets different asset allocation.To make things clearer for you, we have reviewed each one of the best ETFs,including past price performance, future outlook, and more.

1. The Global X Lithium & Battery Tech ETF – Overall Best Lithium ETF UK

Undoubtedly, the Global X Lithium & Battery Tech ETF is the best option forinvestors in order to get exposure to a variety of lithium-related stocks.This fund was founded in 2010 and tracks the performance of global lithiumminers and battery producers. By many opinions, the Global X Lithium & BatteryTech ETF is by far the most effective way to get exposure the lithium becausethe fund simply tracks the full lithium cycle, from mining companies tobattery production companies. As such, the fund holds companies like AlbemarleCorp (12.55%), Ganfeng Lithium Co Ltd (6.07%), EVE Energy Co Ltd (5.45%),Sociedad Quimica Y Minera De Chile SA ADR (4.82%), Tesla Inc (5.21%), etc.Overall, the fund has a total number of 40 holdings, and a total net asset ofaround $2.8 billion as of March 2021. The fund essentially aims to track theperformance of the Solactive Global Lithium Index, which is designed tomeasure the market performance of global lithium-related companies and is sortof the benchmark of the lithium market. This ETF has a net expense ratio of0.75%, which is considered a good expense ratio.In terms of market performance, this ETF has been on fire since thecoronavirus pandemic crisis started in late March 2020. Back then, the fundfell from around $30 per share to a four-year low of $18.70. But, in line withthe market recovery, the Global X Lithium & Battery Tech ETF gained over 220%in the past year, rising from around $19 per share to its current price of$59. During this time, the ETF has also reached its all-time high of $74.8.Finally, another reason why the Global X Lithium & Battery Tech ETF is themost popular lithium ETF is that it also pays annual dividends for investorsthat hold the fund. It has a yearly dividend yield of around 0.41%, which is agreat bonus in the low-interest-rate environment.Your capital is at risk.

3. Amplify Lithium & Battery Technology ETF

Another ETF that tracks lithium-related stocks is the Amplify Lithium &Battery Technology ETF (NYSE: BATT). This fund is managed by AmplifyInvestments LLC and tracks the market performance of the EQM Lithium & BatteryTechnology Index. In terms of the expense ratio, Amplify charges an annualrate of just 0.59%.Simply put, this ETF invests in battery materials and technology companies.This means you indirectly invest in companies like BHP Group Ltd ADR, Tesla,Nio, Contemporary Amperex Technology Co Ltd Class A, Glencore, Mining andMetallurgical Company NORILSK NICKEL PJSC ADR, etc. It also has a high Ratingof A based on the MSCI ESG Fund Rating.A quick look at the chart shows that Amplify Lithium & Battery Technology ETFis perhaps the most stable and less volatile lithium ETF on our list. Thatsaid, the fund has generated a 1-year return of 84% though it has a negativereturn of -2.25% in 2021.Your capital is at risk.

Are Lithium ETFs a Good Investment?

When we take all factors into consideration, lithium is expected to be one ofthe most important materials in the next decades. This is because lithium iswidely used in electronic devices batteries like mobile phones, laptops,tablets, etc. But more importantly, the rapid growth of the electric vehiclemarket around the world will have a huge impact on lithium-related mining andproduction companies.Currently, as investors cannot directly invest in lithium as a commodity sinceit is not traded on any futures trading exchange, the best option to invest inlithium is by buying an individual lithium stocks UK or invest in a lithiumETF that enables users to get the diversification of lithium public tradedcompanies.When we analyze the lithium market, most analysts expect to see continuedgrowth for lithium, particularly given the fact that electric vehicles such asTesla are going to become a common sight on our roads in the near future. If,indeed, the demand for lithium will grow exponentially in the upcoming years,ETFs are simply the best way to invest in lithium as they allow users toinvest in the full cycle of lithium by holding stocks of mining, refining, andproducing companies.

Best Lithium ETF UK Investment Platforms 2021

If you have set your mind on buying a particular lithium ETF, the next thingyou need to do is to find a regulated brokerage firm in the United Kingdomoffering you to trade US and global listed ETFs.To help you find the right platform, below we analyze two of the most popularonline trading platforms and investment apps in the UK that enable you, amongother assets, to buy and sell lithium ETFs.

1. eToro – Invest in lithium ETFs with 0% Commission

eToro is perhaps the best option available for UK investors that want to getaccess to lithium ETFs. This FCA-regulated broker is known as the largestsocial trading platform in the world with more than 17 million members thatcan trade and buy shares, as it offers over 3000 financial instruments fromvarious markets. This includes FX currency pairs, stocks, ETFs, indices,commodities, and cryptocurrencies.The reason why eToro is, in our view, the best trading platform for investingin ETFs is because it offers a zero commission trading model on a wide rangeof 249 Exchange Traded Funds from different stock exchanges in the world.These ETFs can be traded with a margin requirement of just 20%, meaning aleverage ratio of 5:1.In terms of lithium ETFs, eToro offers the most liquid and traded lithium-related ETF in the world, the Global X Lithium & Battery Tech ETF. Best ofall, when you buy and sell this ETF on the eToro platform, the broker does notcharge any trading commissions. You’ll also get access to effective analysisand research tools such as a news feed specifically related to this ETF,interactive chart, important stats, and research section.67% of retail investors lose money trading CFDs at this siteBesides the Global X Lithium & Battery Tech ETF, eToro also offers a greatselection of individual lithium related stocks such as Albemarle Corporation(NYSE: ALB), EnerSys (NYSE: ENS), Energizer Holdings, Inc (NYSE: ENR), FMCCorporation (NYSE: FMC), and more. Much like ETFs, buying shares with eToro iscommission-free, meaning you’ll have to pay the bid and ask spread only. Also,unlike traditional brokerage firms in the UK, eToro does not charge accountmanagement fees nor deposit fees.Best of all, eToro supports a range of social trading tools. Being the largestsocial trading network in the world, eToro offers users to get access to theCopyTrade tool that enables you to choose another investor within the networkand automatically copy the trades of the chosen investor. Additionally, you’llbe able to invest in built-in managed portfolios based on a specific industry,region, or theme.In terms of the account creation process, you’ll have to sign up and create anaccount with eToro. Then, once you verify your identity, you can make adeposit of at least £140 by using one of the supported payment methods. Thisincludes debit and credit card, bank wire transfer, PayPal, Neteller, andSkrill.Pros: * Best platform for beginner investors * Huge range of ETFs, including lithium related ETFs * Besides ETFs, eToro offers trading on stocks, indices, commodities, forex, cryptocurrencies and more * More than 2400 stocks listed on the London Stock Exchange and 16 international markets * Deposit funds with a debit/credit card, bank wire transfer, and e-Wallet like PayPal. * Features the CopyTrade tool and built in CopyPortfolios * Regulated by the Financial Conduct Authority (FCA)Cons: * Not suitable for advanced traders that like to perform technical analysis67% of retail investors lose money trading CFDs at this site

Best Lithium ETF UK – Conclusion

To summarise, the best lithium ETF UK could be a great strategy to diversifyyour portfolio and get an opportunity to make a long-term return on yourmoney. Among all the lithium investment options, ETFs are the best way to getexposure to a variety of lithium mining and lithium producers in one singleasset.From this guide on the best lithium ETFs UK, you now have the knowledge neededto decide what are the best lithium ETFs to buy right now and what is the bestonline trading platform in which you can invest in these assets.If you’re looking to invest in one of the lithium ETFs on our list, eToroallows you to buy stocks and ETFs without paying any commissions and accountmanagement fees.

Are lithium ETFs a risky investment?

Like any other investment, there’s always a risk when you invest in lithiumETFs. That said, lithium is an important resource for making batteries, whichis one of the most in demand materials these days. Yes, there’s a risk thatthe ETF’s price will lose part of its value, however, there’s no real riskthat these ETFs will become worthless or decrease significantly in the future.

Are lithium ETFs suitable for long-term investments?

Generally, yes.This is particularly true when taking into consideration thefact that some ETFs offer annual dividend payments. For example, the Global XLithium & Battery Tech ETF average dividend yield stands at around 1.5% in2020.About Tom Chen PRO INVESTORTom is an experienced financial analyst and a former grains derivatives daytrader specializing in futures, commodities, forex, and cryptocurrency. He hasover 10 years of experience in the Finance industry spanning across a daytrader position at Futures First, and a web content editor and writer atFXEmpire. Tom is an expert in the areas of day trading and technical analysisas it applies to futures, cryptocurrencies, forex, and stocks. Tom’s primaryinterests include economics, trading, social-economic systems, technology, andpolitics. He has a B.A. in Economics and Management, a Journalism FeatureWriting certificate from the London School of Journalism. Tom has written forvarious websites, such as FX Empire, The Motley Fool, InsideBitcoins, YahooFinance, and Learnbonds.Read next7 Lithium and Battery Stocks for Big Growth2020 became the year of electric vehicles (EVs) on Wall Street. Investorslooking for the next Tesla (NASDAQ:TSLA) readily invested in businesses thathad a “clean-energy” niche. As a result, the risk appetite in battery sharesalso increased significantly, pushing these stocks to record highs in recentweeks. Today’s article introduces seven lithium and battery stocks that couldbe poised for further growth in the coming quarters.According to recent research conducted by members of the Argonne NationalLaboratory in Lemont, Illinois, “The currently commercialized lithium‐ionbatteries have allowed for the creation of practical electric vehicles,simultaneously satisfying many stringent milestones in energy density,lifetime, safety, power, and cost requirements of the electric vehicleeconomy.”Statista editor Willem Roper highlights, “New data shows how the demand forlithium-ion batteries has crept up over the last decade and will skyrocket aswe enter the next.”The new President Joe Biden administration is expected to support more cleanenergy initiatives. Thus, the future looks bright for the EV sector. Batterystocks could also reach new all-time highs in the year.However, the current risk appetite makes such battery stocks volatile,especially in the short run. You should be ready to embrace swings in price,possibly with a downward during the ongoing earnings season.With that information, here are seven lithium and battery Stocks that couldenergize portfolios: * Albemarle (NYSE:ALB) * Amplify Lithium & Battery Technology ETF (NYSEARCA:BATT) * Global X Lithium & Battery Tech ETF (NYSEARCA:LIT) * Lithium Americas (NYSE:LAC) * Livent Corp (NYSE:LTHM) * Plug Power (NASDAQ:PLUG) * Switchback Energy Acquisition (NYSE:SBE)

Amplify Lithium & Battery Technology ETF (BATT)

Source: Shutterstock52-Week Range: $5.91 – $18.80 Dividend Yield: 0.4% 1-Year Change In Price: Up 74% Expense Ratio: 0.59%, or $59 per $10,000 invested annuallyOur next discussion centers around an exchange-traded fund (ETF), namely theAmplify Lithium & Battery Technology ETF. The fund’s focus is users ormanufacturers of lithium battery technologies. Such businesses might providebattery materials or storage solutions. EVs that rely on lithium batteries arealso among the holdings.BATT, which tracks the EQM Lithium & Battery Technology Index, holds 72stocks. As far as sectors are concerned, Materials (49.3%), Automobiles &Components (20.9%), and Capital Goods (14.5%) lead the list.Over 4o% of its net assets of $78 million are in the 10 ten names. EV darlingTesla, China-based battery systems business Contemporary Amperex Technology,EV group Byd (OTCMKTS:BYDDY), and leading global resources name BHP (NYSE:BHP)and LG Chemical, the largest South Korean chemical company, make up the topnames in the roster.2021 has started on a solid footing for investors in BATT. In late January, ithit a record high, and is up about 12% since the start of the new year.Potential investors could consider buying into the declines.

Global X Lithium & Battery Tech ETF (LIT)

Source: Olivier Le Moal/ShutterStock.com52-Week Range: $17.83 – $72.95 Dividend Yield: 0.4% 1-Year Change In Price: Up 128% Expense Ratio: 0.75%Our next choice today is also an ETF, i.e, the Global X Lithium & Battery TechETF, which gives exposure to firms that focus on lithium worldwide. They mightrange from mining and refining lithium to manufacturing lithium batteries.LIT, which tracks the Solactive Global Lithium Index, has 40 holdings. Thisfund’s net assets stand close to $2.9 billion. From a geographic standpoint,China-based companies top the list with 44%, followed by the U.S. (22%), SouthKorea (12), and Japan (6.7%), among others.Big names Albemarle, Ganfeng Lithium, LG Chemical, Tesla, and Samsung compriseclose to 35% of the fund. Since the start of 2021, the fund is up over 9% andhit a record high in early January.Given the recent choppiness in broader markets, some investors might decide totake money off the table. But the long-term prospects for the industry aresolid.

Tell Us What You Think

0 Comment

Leave a comment