LIT ETF: Fares Well Against BATT ETF, Maybe A Good Time To Take A Nibble

seekingalpha08-01

Global X Lithium & Battery Tech ETF is a $1.2bn product covering global stocks involved in lithium mining and battery technology.We juxtapose LIT against a close peer - BATT.We provide some commentary...

Source Link

Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

Comments

We need your insight to fill this gap

Leave a comment

{"i18n":{"language":"en_US"},"isChannel":false,"data":{"share":"https://ttm.financial/m/news/2456136192?lang=en_US&edition=fundamental","thumbnail":"https://static.seekingalpha.com/cdn/s3/uploads/getty_images/2049011448/image_2049011448.jpg","is_english":true,"pubTime":"2024-08-01 06:21","share_image_url":"https://static.laohu8.com/5a36db9d73b4222bc376d24ccc48c8a4","id":"2456136192","market":"hk","top_or_hot":-1,"title":"LIT ETF: Fares Well Against BATT ETF, Maybe A Good Time To Take A Nibble","media":"seekingalpha","content":"<div>\n<p>Global X Lithium & Battery Tech ETF is a $1.2bn product covering global stocks involved in lithium mining and battery technology.We juxtapose LIT against a close peer - BATT.We provide some commentary...</p>\n\n<a href=\"https://seekingalpha.com/article/4708780-lit-etf-fares-well-against-batt-etf-good-time-to-take-a-nibble\">Source Link</a>\n\n</div>\n","source":"seekingalpha","html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>LIT ETF: Fares Well Against BATT ETF, Maybe A Good Time To Take A Nibble</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nLIT ETF: Fares Well Against BATT ETF, Maybe A Good Time To Take A Nibble\n</h2>\n\n<h4 class=\"meta\">\n\n\n2024-08-01 06:21 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4708780-lit-etf-fares-well-against-batt-etf-good-time-to-take-a-nibble><strong>seekingalpha</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Global X Lithium & Battery Tech ETF is a $1.2bn product covering global stocks involved in lithium mining and battery technology.We juxtapose LIT against a close peer - BATT.We provide some commentary...</p>\n\n<a href=\"https://seekingalpha.com/article/4708780-lit-etf-fares-well-against-batt-etf-good-time-to-take-a-nibble\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"BK4109","symbol_name":"特种化学制品","start_time":0,"source_url":"https://seekingalpha.com/article/4708780-lit-etf-fares-well-against-batt-etf-good-time-to-take-a-nibble","article_id":"2456136192","we_media_id":null,"thumbnails":["https://static.seekingalpha.com/cdn/s3/uploads/getty_images/2049011448/image_2049011448.jpg"],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=2456136192","pubTimestamp":1722464489,"sourceInfo":{"source_id":"seekingalpha","name":"Seeking Alpha"},"weMediaInfo":null,"summary":"Global X Lithium & Battery Tech ETF is a $1.2bn product covering global stocks involved in lithium mining and battery technology.We juxtapose LIT against a close peer - BATT.We provide some commentary on the lithium market.We close with some thoughts on the technicals.   Just_Super Introduction Prospective investors looking for a diversified proxy to capitalize on stocks involved in the full lithium cycle may be tempted by the Global X Lithium & Battery Tech ETF . This $1.2bn sized product, with a 14-year trading history, is considered to be one of the more preeminent offerings in this space. Admittedly, this ETF which covers global stocks involved in lithium mining, exploration, and battery technology, has experienced a rather dismal 12 months; whilst the key equity benchmark has notched up respectable gains of over 20%, the ETF in focus has contracted by -41% during the same period. YCharts Regardless, if you’re mulling over a position in this product, here are a few important things","collect":0,"end_time":0,"defaultTopTitle":"seekingalpha.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"BK4109":"特种化学制品","LIT":"Global X Lithium & Battery Tech ETF","LU2023250504.SGD":"Allianz Thematica Cl AMg DIS H2-SGD","ALB":"美国雅保","LU2249611893.SGD":"BNP PARIBAS ENERGY TRANSITION \"CRH\" (SGD) ACC","BK4585":"ETF&股票定投概念","LU0823414478.USD":"法巴经典能源转换基金","LU1861214812.USD":"Blackrock Future of Transport A2 USD","LU1861219969.SGD":"Blackrock Future of Transport A2 SGD-H","LU1720051017.SGD":"Allianz Global Artificial Intelligence AT Acc H2-SGD","FDN":"First Trust Dow Jones Internet I","BK4588":"碎股","BATT":"Amplify Lithium& Battery Technology ETF","BK4545":"锂电池","LU1548497426.USD":"安联环球人工智能AT Acc","LU1244550221.USD":"FRANKLIN GLOBAL MULTI-ASSET  INCOME \"A\" (USDHEDGED) INC (M)","BK4550":"红杉资本持仓","LU1244550577.SGD":"FTIF - Franklin Global Multi-Asset Income A (Mdis) SGD-H1","LU1803068623.USD":"TEMPLETON GLOBAL CLIMATE CHANGE \"AH1\" (USDHDG) ACC","LU1244550494.USD":"FRANKLIN GLOBAL MULTI-ASSET INCOME \"A\" (USDHEDGED) ACC","LU1720051108.HKD":"ALLIANZ GLOBAL ARTIFICIAL INTELLIGENCE \"AT\" (HKD) ACC","LU1917777945.USD":"安联专题基金Cl AT Acc","BK4548":"巴美列捷福持仓","LU1974910355.USD":"Allianz Thematica Cl AMg DIS USD","RS":"Reliance Steel & Aluminum Co","LU2357305700.SGD":"Allianz Global Artificial Intelligence ET H2-SGD","BK4006":"钢铁","LU2106854487.HKD":"ALLIANZ THEMATICA \"AMG\" (HKD) INC"},"translate_title":"LIT ETF：相对于BATT ETF表现良好，也许是买入的好时机","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"BATT":1,"RS":1,"LIT":1,"FDN":1,"ALB":1},"content_text":"Global X Lithium & Battery Tech ETF is a $1.2bn product covering global stocks involved in lithium mining and battery technology.We juxtapose LIT against a close peer - BATT.We provide some commentary on the lithium market.We close with some thoughts on the technicals.   Just_Super Introduction Prospective investors looking for a diversified proxy to capitalize on stocks involved in the full lithium cycle may be tempted by the Global X Lithium & Battery Tech ETF (NYSEARCA:LIT). This $1.2bn sized product, with a 14-year trading history, is considered to be one of the more preeminent offerings in this space. Admittedly, this ETF which covers global stocks involved in lithium mining, exploration, and battery technology, has experienced a rather dismal 12 months; whilst the key equity benchmark has notched up respectable gains of over 20%, the ETF in focus has contracted by -41% during the same period. YCharts Regardless, if you’re mulling over a position in this product, here are a few important things to note. LIT vs. BATT After LIT, the other key alternative that typically gets bandied around in lithium circles, is the Amplify Lithium & Battery Tech ETF (BATT). Which one would we plump for? Well, despite largely fishing in the same pond, both products have quite distinct traits, which may appeal to different investors. LIT has had an almost 8-year head start over BATT which only got listed in June 2018. Yet, the differential in the respective AUMs of the two products is quite huge at over 16x (in favor of LIT)! The promoters of BATT may be quite disheartened with this wide disparity, when it appears that their product is more cost competitive, and has a better income profile. To elaborate, BATT’s expense ratio of 0.59% is 16bps lower than LIT’s corresponding expense ratio. YCharts Also note that since 2022, the variance in the dividend yields of the two products has only continued to grow, with BATT now offering a very competitive figure of 4%, whereas LIT only offers less than 1.6% (although both products offer yields that are better than their long-tern averages). What’s important to note is that BATT has been more generous than LIT in expanding its payouts; over the last 3 years, payouts of LIT have only grown at 70%, whereas BATT’s dividends have grown at a far greater pace of 117%. One factor that works in favor of LIT is that it appears to be less prone to annual churn, even though it covers a much smaller pool of stocks. LIT only covers 47 stocks, and only around a fifth of its portfolio get churned every year, which makes it more tax efficient. BATT covers twice the number of stocks as LIT (95 stocks compared to 47 stocks). Given that LIT focuses on a much smaller pool of stocks, it’s no surprise to discover the greater concentration of its top holdings (the top 10 of LIT account for 53% of the total portfolio, whereas BATT’s top 10 only accounts for 40%). Also note that LIT is more oriented towards stocks with strong exposure to the Chinese region (37% exposure) which serves the largest and fastest-growing EV market in the world, whereas with BATT, the US takes center stage (22% exposure). The other key differentiator to note is that LIT is more of an upstream play, as it leans more towards lithium miners, and is open to letting the individual weights of these miners reach even 20%, before capping those weights (currently its top holding is the world’s largest Lithium producer - Albemarle). On the other hand, the downstream battery producers that comprise its portfolio are required to have their weights capped at just 4%. BATT doesn’t impose any sector-specific caps such as this, but rather employs uniform capping of its holdings at 7%. Investors may also want to consider that BATT dabbles with stocks across the market-cap spectrum, touching even some speculative micro-cap plays, which contribute 12% of the total holdings. LIT though refrains from doing so, with microcaps accounting for less than 1% of the total portfolio. As far as valuations go, both products are not particularly cheap, but LIT is priced at a steeper P/E (20.5x) that is 9% more than BATT’s corresponding multiple. Some investors may be prepared to pay that premium, as one is also getting a better cadence of long-term earnings growth of almost 12% (as opposed to just 10% for BATT) When it comes to the historical track record of these two products, we have only one clear winner – LIT. Note that BATT has proven to be a source of massive wealth destruction since it made its debut in 2018, whereas LIT has still managed to generate unremarkable, but positive gains of 22% during the same period. YCharts Yet, LIT also appears to have taken on more risk in its attempt to generate returns, and that comes through in the respective volatility profiles of these two products. YCharts A lot of ETF products fail to generate excess returns (over the risk-free rate) that commensurate with the total risk taken during a period (essentially implying a Sharpe ratio of 1x or more) and LIT is no exception, but it still throws up much better figures over a 5-year time period, and even though it too delivers a negative Sharpe ratio like BATT over the three-year time frame, once again it beats its smaller peer. YCharts Lithium Market Commentary The lithium market is in a bad way (Chinese-based lithium carbonate is now at its lowest point since Aug 2021) as it is being battered by many headwinds, although one can still spot a few green shoots. Reuters Firstly, elevated policy interest rate thresholds in recent periods have knocked the stuffing out of prospective car owners, and with EVs (which account for the lion’s share of lithium demand) the affordability situation is even more pressing, given their relatively higher ticket price. For context, in the US, over half of gas powered or hybrid vehicles can be picked up at a price of less than $37,000, but only 3% of all EVs are priced at below that mark, making them more of an elitist play. Previously, there have also been question marks over EV charging infrastructure, and their ability to support longer range EV models (limited range has been another deterrent for EV ownership), but recent reports suggest that the economic scenario with charging stations is improving, and it could also receive some fillip from the National Electric Vehicle Infrastructure Deployment Program (NEVI), which could see $5bn of federal funds being devoted towards establishing at least one public fast charging station every 50 miles of the US’s major transportation routes. With more charging stations on the anvil, and potentially lower interest rates in 2025, could the demand-side stage a comeback? Meanwhile, the supply side has ramped up considerably in recent periods, with the lithium market largely expected to be in a balanced state through 2026. Global X However, quite a significant chunk of the additional supply in recent periods has also come from informal artisanal miners based in Africa, and it is questionable if they have the staying power in the current price environment. For instance, last year, these small-scale miners contributed close to 67% of total African supply, with volumes almost accounting for last year’s global market surplus. ALB June 2024 Presentation Large vertically-integrated players such as Albermarle (ALB) which LIT is well-exposed to, are better prepared to weather the storm under current market prices, whereas most of the high-cost small-scale producers who are not even breaking-even will be forced to exit, making the supply situation more palatable. Meanwhile, lithium carbonate inventories in China, which were beaten down, appear to be slowing, inching up since April, and reports coming out of China suggest that enquiries for battery-grade lithium carbonate have picked up, as consumers look to take advantage of relatively lower prices. One is not necessarily suggesting that things are only looking up from now, but we also feel that the slump has been going on for too long, and as the market adjusts to the underlying realities, some of the well-established integrated entities that LIT covers will be better positioned to bounce back. Closing Thoughts - Is LIT ETF A Good Buy Now? Lithium stocks may not be having their day in the sun, but the charts suggest that there may be some light at the end of the tunnel. On the monthly charts of LIT, weakness in the price action is still quite evident, with a series of lower-lows (LLs) and lower-highs (LHs), even as it fails to break past a descending trendline. Yet, investors may want to note that the product has now dropped to levels which have historically served as useful pivot points. Investing In 2011, we saw the current price zone serve as an area of resistance, and once again, the scenario was repeated in 2015. With the price now revisiting those levels, there’s a good chance it bottoms out here before pivoting in the other direction. Meanwhile, also note that the RSI indicator has now dropped to a point last seen in 2015, from where we saw the price bottom out before resuming a move higher. Finally, also note that the relative strength (RS) of LIT’s portfolio versus other global stocks is not too far away from hitting the lows last seen in 2019 and 2015. Given that the current RS is still only a third of its long-term average (0.502), we see decent scope for mean-reversion. YCharts  All these factors make us turn cautiously optimistic on LIT, and thus we wouldn’t be averse to taking a nibble at current levels.","kind":null,"is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"0","news_tag":"","news_rank":0,"symbols":[],"gpt_button":1},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.29.2","shortVersion":"4.29.2","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2456136192"}