Top Energy Storage Batteries ETFs
With the global shift toward cleaner energy sources, the demand for energy storage solutions is growing. This provides promising prospects to ETF investors who would like to enter the market. Get to know which ETFs offer exposure to the stocks of battery energy storage companies.
Top Battery Energy Storage ETFs
With the global transition from conventional energy sources to green energy, BESS technologies continue developing together with related ETFs. The costs of ESS are projected to reduce by 66-80 percent by 2030, and the global energy storage market is expected to grow up to 426bln USD. This growth will influence other sectors, digital eco-systems will grow and develop, supporting the new era of battery powered electricity.
Energy storage is a critical factor helping to advance renewable energy. Wind or solar power cannot be generated 24 hours a day and requires storing. E-cars need sufficient amounts of energy stored to drive for hundreds of kilometers.
Li-ion batts are now used everywhere. They have replaced the lead acid counterparts because of superb electro-chemical potential of Li. Moreover, Li is the most lightweight metal, which allows effectively using it in portable devices.
EV market is among other sectors encouraging the development of Li-ion technologies. Most car manufacturers already make or are planning to create hybrid or e-vehicles, since battery costs have decreased and are becoming competitive with ICE vehicles.
Energy storage is an attractive opportunity to invest in sustainable environment. The tech is well-established and continues to innovate, assisting in the world's shift toward alternative energy.
It can be an exciting investment option considering the predicted growing demand for ESS in the following years due to the development of clean energy and EV sectors.
The battery value chain includes miners of metals for battery manufacturing, battery makers and storage tech providers. All of them can potentially benefit from the expected industry growth.
Investors can profit from these prospects, using the targeted investment strategies. The number of exchange traded funds tracking the companies engaged in battery and energy storage solutions is increasing, as the demand for BESS continues to grow. Thus, LIT provides exposure to the full Li cycle ranging from mining and refining to battery manufacturing. Another fund – Amplify Advanced Battery Metals and Material ETF – follows the performance of publicly traded Li, Co, Ni, Mn, and C miners, explorers, producers, developers, processors and recyclers.
The top-ranking energy storage ETFs are as follows:
- Global X Lithium & Battery Tech ETF
- L&G Battery Value-Chain UCITS ETF
- Vanguard Energy ETF
- First Trust NASDAQ Clean Edge Smart Grid Infrastructure Index Fund
- First Trust NASDAQ Clean Edge Green Energy Index Fund
- WisdomTree Battery Solutions UCITS ETF
- Amplify Advanced Battery Metals and Material ETF
- ARK Autonomous Technology & Robotics ETF
- ETFS Battery Tech & Lithium ETF
Global X Lithium & Battery Tech ETF (LIT)
The ETF allocates its funds in the stocks of companies engaged in Li mining and exploration, as well as Li battery manufacturing. The wide range of lithium-related processes provides investors with direct exposure to prices of Li as well as a diversified portfolio of Li mining and producing companies. The fund includes 43 holdings, top of which are Albemarle Corp., LG Chem, and Tesla.
The key sectors are electrical components/equipment, commodity chemical, auto/truck manufacturing. The rest of sectors constitute less than 10 percent each.
The top regions where LIT invests are Asia Pacific (over 72 percent) and North American (around 20 percent) countries. Latin American and European countries get a little more than 3 percent each.
The fund was launched on July 22nd, 2010. Its AUM constitutes 736.72 million USD, expense ratio is 0.75 percent. The index followed is Solactive Global Lithium Index. The year-to-date return is 41.02 percent.
L&G Battery Value-Chain UCITS ETF (BATT)
The fund was launched on January 18th, 2018. The index tracked is Solactive Battery Value-Chain Index.
The close price as of August 17th, 2020, is $10.98; net asset value as of July 31st, 2020, is $10. The ADTV constitutes 2,284 shares. The year-to-date return as of August 17th is £25.83. The ETF is traded on LSE. The fund and share class size is $158.27 million.
BATT provides exposure to stocks of firms providing for electrochemical energy storage techs as well as miners producing metals for battery manufacturing. The underlying index utilizes a screening methodology to pick battery makers mapped in accordance with tech types (lithium, lead, nickel or sodium) as well as Li mining companies as current Li manufacturers.
The assets are allocated as follows: 99.81% of net assets are long-term allocations in stocks, while 0.19% constitutes cash (1.15% – long-term, 0.97% – short-term).
The fund mostly invests in the following five areas: Japan (25.31%), USA (22.47%), European (13.05%), Australasian (12.87%), and Emerging Markets Asian (9.12%) countries.
The key sectors the ETF focuses on are consumer cyclicals (29.42%), industrial (27.7%), basic materials (25.89%), and tech (16.99%).
The largest holdings include Tianneng Power International Limited, LG Chem Limited, Tesla, and SolarEdge Technologies.
Vanguard Energy ETF (VDE)
The ETF's launch date is September 23rd, 2004. The fund tracks the performance of an index measuring the RoI of energy stocks. Management is passive, there are two investment strategies used: full replication and sampling (when the former is impossible). VDE invests in the stocks of firms specializing in E&P of fossil fuels.
The fund's assets are represented by sector specific stocks, the category is energy equities. Expenses constitute 0.1 percent (as on December 20th, 2019).
The market price and net asset value as on August 17th, 2020, is 51.27 USD. The 30-day yield as on July 31st, 2020 is 5.33 percent.
The ETF's shares can be redeemed with the issuer only in huge quantities worth millions of USD. The shares have to be bought and sold at the aftermarket and held in brokerage accounts. A brokerage commission can be imposed on investors, which results in payments exceeding NAV when you buy and receiving less when you sell.
The fund's portfolio is composed of the companies engaged in coal and consumable fuel (0.1 percent), integrated O&G (44.9 percent), and those specializing in O&G drilling (0.7 percent), equipment/services (9.1 percent), E&P (22 percent), refining/marketing (11.7 percent), as well as storing and transporting (11.5 percent). The firms are categorized according to GICS.
As on July 31st, 2020, VDE has 122 stocks, the total net assets are 3.2bln USD, 69.7 percent of which are top ten holdings. Foreign stocks constitute 0.5 percent.
The top 3 holdings are Exxon Mobil Corporation, Chevron Corporation, and ConocoPhillips Inc.
First Trust NASDAQ Clean Edge Smart Grid Infrastructure Index Fund (GRID)
The benchmark index is NASDAQ OMX Clean Edge Smart Grid Infrastructure Index, tracking the performance of common stocks in the electricity infrastructure sector. The firms tracked specialize in power grid, electrical meters/devices, electrical network, energy storing & managing, as well as enabling SW used in smart grid infrastructures.
The fund comprises of 59 holdings. The key sectors are industrial, utility, tech, consumer cyclical, energy, and basic material. The ETF includes companies of different size ranging from large-cap (over 44 percent) through mid-cap (around 32 percent) and small-cap (more than 20 percent) to micro-cap (approximately 2.5 percent) firms.
GRID's inception date is November 17th, 2009. Expense ratio constitutes 0.7 percent, AUM is 50.94 million USD.
The largest holdings include SolarEdge, Schneider Electric, and Aptiv PLC.
First Trust NASDAQ Clean Edge Green Energy Index Fund (QCLN)
The ETF offers an opportunity to buy the stocks of emerging clean tech, biofuel and PV companies. The ETF's portfolio is composed of companies engaged in advance material, smart grid, hybrid battery, and clean energy generation manufacturing, developing, distributing, or installing.
The fund invests in 43 holdings, the top of which include Tesla, Nio Inc, SolarEdge, Albemarle, Enphase Energy, and First Solar.
Over 90 percent of the fund's assets are allocated in North American countries (USA constitutes 83.57 percent and Canada – 9.5 percent). It mostly focuses on mid-cap (over 67 percent) and small-cap (more than 21 percent) firms. Large-cap companies constitute less than 10 percent, and micro-caps – 1 percent of total allocations.
QCLN was established on February 8th. 2007. It has AUM of 392.09 million USD and expense ratio of 0.6 percent. The year-to-date return constitutes 57.67 percent.
WisdomTree Battery Solutions UCITS ETF (CHRG)
In March, 2020, WisdomTree announced the inception of a new theme ETF. The new fund is LSE-listed, its expense ratio constitutes 0.4 percent. The benchmark index is the WisdomTree Battery Solutions Index, created in partnership with Wood Mackenzie. The index follows the performance of firms specializing in battery energy storage systems. The companies included are engaged in such categories as raw materials, manufacture, enabler, and emerging technologies.
It is the second European ETF involved in ESS after BATT. Today, the need of storage solutions is especially urgent, with the global tendency to address the climate crisis, and shifting toward portable devices and e-vehicles. It is predicted that the number of e-cars will increase ten times in twenty years. Battery solutions are a key player in CO2 emission reduction, which is vital in order to keep within the limited temp rise of 1.5 degrees Centigrade in accordance with the UN Paris agreement.
CHRG's largest holdings include Contemporary Amperex Technology, Jiangxi Ganfeng Lithium Co Ltd, GEM Co Ltd, and SolarEdge. Most of the fund's investment goes to USA's, Chinese and Japanese companies.
Amplify Advanced Battery Metals and Material ETF (BATT)
The fund's inception date is June 6th, 2018. It has an expense ratio of 0.72 percent, its AUM constitutes 6.83mln USD.
The ETF tracks the performance of firms engaged in advanced batt materials and techs. Its portfolio consists of 34 holdings, 10 percent of all assets is allocated in Mutual Fund. The rest of allocations are distributed between such holdings as Lithium Americas Corporation, Sumitomo Metal Mining, Zhejiang Huayou Cobalt, and others.
The fund mostly invests in Australian, Canadian, Hongkongese and Chinese companies.
ARK Autonomous Technology & Robotics ETF (ARKQ)
The fund invests in such sectors as self-driving vehicles, robot technology, three-dimensional printing, space exploration, and energy storage. The firms included are likely to considerably profit from innovative products and technologies as well as R&D related to materials, manufacture, transport, automation, and energy.
The ETF was founded on September 30th, 2014. Its net assets equal 317mln USD, expense ratio is 0.75 percent. The ADTV is 178,106.
The number of holdings tracked ranges between 30 and 50. The largest ones are Tesla, 2U, and Xilinx.
The management type is active. Around 80 percent of the ETF's allocations go to both domestic and foreign equities of autonomy tech and robot tech firms, which are relevant to the ETF's strategy of investing in disruptive innovations.
ETFS Battery Tech & Lithium ETF (ACDC)
The fund tracks the Solactive Battery Value-Chain Index. The inception date is August 30th, 2018. The ETF's size is $25.35mln. Expense ratio is 0.82 percent.
ACDC's global portfolio is comprised of 28 holdings from multiple regions and sectors, the largest of which are Tianneng Power International, Tesla, LG Chem, Pilbara Minerals Limited.
The fund follows the performance of firms engaged in the battery supply chain, which ranges from Li mining to battery manufacturing. The companies tracked specialize in providing electro-chemical storage tech, mining and producing of metals for battery making.
The investing methodology used is full replication, which means the fund holds all the shares making up the index. Every holding constitutes the same portion of ACDC's portfolio at every index rebalancing time, which keeps their contribution to overall performance equal.
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