Updated: Feb 22
What are ETF's?
What is an Electic Vehicle (EV) ETF?
Top Electric Vehicle (EV) ETF's.
By: Allan R Kirby
What is an ETF?
An ETF is a security that contains a collection of investments, usually stocks and bonds. The investments could be a collection of stocks in the same industry or one that tracks an index such as the Dow Jones Industrial Average (DJIA), S&P 500 Index, or the Nasdaq Composite Index. Additionally ETF's are similar to mutual funds but can be bought and sold on the stock exchanges and provide expenses that are much lower than what a mutual fund would charge.
Some of the benefits of an ETF include:
1. ETF's are a great way to invest in a sector or index for both professionals and novice investors alike.
2. Eliminates single stock risks.
3. Allows you to be diversified.
4. Expense fees to run the ETF are very low.
5. It's easy to buy and sell ETF's.
6. Great investment for the more passive investor .
Electric Vehicle (EV) ETF
So what is an Electric Vehicle (EV) ETF? It's an investment fund that invests in autonomous driving technology, electric vehicles, batteries, and other components that make up an EV vehicle. Some companies that you can find in EV ETF's include:
Plug Power Inc.
Electric Vehicle ETFs are very popular today because more investors are expecting consumers around the world to transition away from fossil fuel vehicles to electric. Additionally, younger generations are looking to invest in industries that have a positive social and environmental impact. The EV industry does just that, it contributes to the reduction of emissions.
The following are the 3 top Electric Vehicle (EV) ETF's to buy:
Global X Autonomous & Electric Vehicles ETF (DRIV).
iShares Self-Driving EV and Tech ETF (IDRV).
SPDR S&P Kensho Smart Mobility ETF (HAIL).
Electric Vehicle ETF's to buy
#1 The Global X Autonomous & Electric Vehicles ETF (DRIV)
Expense Ratio: .68% (A little high)
The Global X Autonomous & Electric Vehicles ETF (DRIV) seeks to invest in companies involved in the development of autonomous vehicle technology, electric vehicles (“EVs”), and EV components and materials. This includes companies involved in the development of autonomous vehicle software and hardware, as well as companies that produce EVs, EV components such as lithium batteries, and critical EV materials such as lithium and cobalt.
Top Holdings include:
Alphabet Inc A
Toyota Motor Corp
Advanced Micro Devices
Cisco Systems Inc
Note: The fund does have other car manufactures in its holding such as GM, Ford, and even NIO.
#2 iShares Self-Driving EV and Tech ETF (IDRV)
Expense Ratio: .47% (Good)
The iShares Self-Driving EV and Tech ETF seeks to track the investment results of an index composed of developed and emerging market companies that may benefit from growth and innovation in and around electric vehicles, battery technologies, and autonomous driving technologies: the NYSE® FactSet® Global Autonomous Driving and Electric Vehicle IndexTM. The index is composed of equity securities of companies listed in one of 43 developed or emerging market countries that derive a certain specified percentage of their revenue from selected autonomous or electric vehicle-related industries, as defined by IDI.
Samsung Electronics Ltd
Alphabet Inc A
Toyota Motor Corp
Siemens N AG
#3 SPDR S&P Kensho Smart Mobility ETF (HAIL)
Expense Ratio: .45% (Good)
The investment seeks to provide investment results that, before fees and expenses, correspond generally to the total return performance of the S&P Kensho Smart Transportation Index. Under normal market conditions, the fund generally invests substantially all, but at least 80%, of its total assets in the securities comprising the index. The index is comprised of U.S.-listed equity securities (including depositary receipts) of companies domiciled across developed and emerging markets worldwide which are included in the Smart Transportation sector as determined by a classification standard produced by the index provider. The fund is non-diversified.
NIO Inc ADR
Plug Power Inc
Workhorse Group Inc
Avis Budget Group Inc
Yandex N.V. Class A Ordinary Shares
General Motors Co.
SolarEdge Technologies Inc.
"What ETF is Tesla in? Tesla can be found in All three ETF's Global X Autonomous & Electric Vehicles ETF (DRIV), iShares Self-Driving EV and Tech ETF (IDRV) and SPDR S&P Kensho Smart Mobility ETF (HAIL)."
Investing long-term in Electric Vehicle (EV) ETF's
As noted by the latest annual Long-Term Electric Vehicle Outlook, published by the research company BloombergNEF (BNEF), EV sales look very good. The publication shows electric models accounting for 58% of new passenger car sales globally by 2040, and 31% of the whole car fleet. They will also make up 67% of all municipal buses on the road by that year, plus 47% of two-wheelers and 24% of light commercial vehicles.
Although there was a brief downturn due to the pandemic, long-term the electric vehicle market looks to continue growing. We like all three funds as they are well diversified and look to be great additions to anyone's portfolio, especially for investors who are concerned about being socially responsible with their investing.
These EV ETFs are designed for people who want to invest in an ETF for electric cars as well as components found in electric vehicles. Although an EV ETF might be of interest to you there are many other more broadly based EFTs that might suit your needs. However, the ETFs we provided are considered some of the best electric cars etf securities
Like all investments, these investments may or may not be for you, however, take the time, do your research and see if these three clean/alternative energy stocks are for you.
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Passive Investors are investors who prefer to buy and hold stocks but are not actively involved with the securities they hold. Passive investors do take care of their overall investment strategies, however, they tend to hold their investments over a longer period of time. Most passive investors invest their money into ETF's and Mutual Funds as these types of investments do not require investors to be actively involved. But many passive investors can and do invest in single stocks as well.
Disclosure: mysmallbank.com nor the author received any compensation from the mentioned securities for this article. The article is our opinion only and is written to help readers learn more about the ETFs mentioned in this article. Consider this as basic information only and utilize professional services and additional sources before making an investment decision.