Which ETF is better ? (EVFM EVS) vs (LIT), Electric Vehicles & Lithium Batt ETFs.
@TigerStars
The world is slowly but surely switching from fossil fuels to battery-powered cars. And there are ways to invest in electric cars beyond buying Tesla stock, for example, through an EV battery ETF. My simple review on two lithium battery ETFs,
1.(EVFM EVS) and 2.(LIT).
1.
(EVFM EVS) NikkoAM-StraitsTrading MSCI China Electric Vehicles And Future Mobility ETF
Listing Price: SGD $1.00 per share
Minimum Order: 1,000 shares
Exchange: SGX (Singapore Stock Exchange)
Commission fee: $40 per order of 1000 shares.
Expense Ratio: 0.70%
Managed by: Nikko Asset Management Asia Limited
Dividend: Non
Date: To be listed on 20 Jan 2022
Total: 50 holdings in this ETF
Top Holdings in this ETF:
- Amperex Technology
- NIO
- BYD A & B
- XPeng
- Eve Energy
- Geely Automobile Holdings
- Ganfeng Lithium
- Yunnan Energy New Material
- Sungrow Power Supply
(EVFM EVS) is a new ETF to be listed on SGX Singapore in 20 Jan 2022. It will be listed at a very attractive price of SGD$1.00 per share, but minimum order is at 1000 shares per buy/order.
The concentration is on China Electric vehicles and China Lithium Batt producers. Above are the top holdings (companies) in this ETF.
Countries holdings allocation is at China 67% HongKong 19% n USA 14%
This ETF is heavily concentrated on China’s EV companies n market.
The Chinese industry has momentum. China will be making estimated of 8 million electric cars a year by 2028.
What I understand is that China government is supporting EV in China, the funds supported is unknown. China government could potentially swamp the world with subsidized products.
China may face challenge entering into western market, especially the United States will be a difficult market for China to enter. The US administration imposed 25 percent taxes on cars imported from China. Like wise verse visa.
Therefore the next proxy war between the US and China will be on Electric Vehicles.
But China in itself is already a very huge market. The growth will be exponential.
But I will be wary on China authorities on its own China companies. China's system is designed with a strong-hold to bring corporations in line with government goals. Working towards a “common prosperity”.
In China, the One party-state wants the business community to serve its development objectives and is willing to sacrifice corporate profits and power to make that happen.
This ETF is listed and traded on SGX. SGX is known to have low trading volume, which is a challenge for any ETFs or stocks if you want it to be vibrant to raise up in value.
Traditionally SGX listed ETFs or stocks are mainly bought up by Institutional buyers, very small percentage are retail investors.
Institutional buyers move large blocks of shares and have a tremendous influence on the share. Any decision to buy, hold or dump the stocks will affect retail buyers like me a lot. Retail investors may be caught off guard.
I would prefer a share with good percentage of regular retail investors in it.
Having said that, I still think this (EVFM EVS) ETF can still be a good buy, if it is listed at SGD$1.00 per share. Anything above $2-3 is not attractive to a retail investor like me.
It would be better if it is not minimum order of 1,000 shares per order. With limited funds as a small retail investor, this does not give me room for diversification of investing in other industry.
2.
(LIT) Global X Lithium & Battery Tech ETF
Current Price: USD $84 per share
Minimum Order: 1 share
Exchange: NYSE (New York Stock Exchange)
Commission fee: $1.99 per order
Expense Ratio: 0.75%
Dividend: 0.22% (Semi Annual)
Managed by: Mirae Asset Global Investments
Date: Listed since 2010
Total: 42 holdings in this ETF
Top Holdings in this ETF:
- Albemarle Corp
- Tesla Inc
- BYD
- TDK Corporation
- EVE Energy
- Amperex Technology
- Samsung SDI
- Yunnan Energy New Material
- Ganfeng Lithium
- Wuxi Lead Intelligent
(LIT) is a ETF listed on NYSE New York since 2010. Currently trading at about USD$84 per share.
This ETF is mostly pure play on Lithium Battery manufacturers.
Countries holdings allocation is at China 45%, USA 22%, South Korea 10%, Japan 10% and Rest of the World 13%.
This ETF have a good 45% percentage on China market and 22% on USA market.
Knowing that many Lithium manufacturers are from China, there are a still good amount of US companies moving out of China to manufacture Lithium batteries in US itself, however cost of manufacture will be higher in US. But this could be a safe guard incase there is a trade-war between US and China, imposing high tax on importation of batteries.
And it is also comforting to know that the China holdings in this ETF majority are not (ADR) American Depositary Receipts listed in US, ADR allows non-US companies to be listed in US stock exchange. The China companies stocks in this ETF are mostly from HKSE (Hong Kong Stock Exchange). and Shenzhen Exchange.
So I would say it is pretty safe. Understanding China authorities are displeased and frowning on China companies listing in US instead of listing in Shanghai or HongKong. Where by China can order the companies to delist from US if they find any irregularities that may undermine China’s interest or security.
US have many Mega traditional automobiles companies jumping into EV market as well.
President Biden called for the United States to step up its electric vehicle efforts. During a virtual visit to an electric bus factory in South Carolina, he warned, “Right now, we’re running way behind China.”
North American automakers are on track to build 1.4 million electric cars a year by 2028. It is still vastly smaller in comparison to the speed China is going.
But do remember this ETF is on Lithium Batt manufacturers for all EVs, NOT so much on EVs alone. Batt manufacturers sell internationally to any EV companies that requires Lithium batts.
For me I would not bet on EV companies alone. In future every automobiles companies will be producing EVs once the market matures. And market will be saturated with EVs. However all EVs companies need Lithium Batteries and these Batts will be in huge demand. And lithium is in shortage now.
Electric vehicle growth is also linked to greater availability of public and workplace charging. Hence infrastructure need to be in place with more charging stations nationwide in order for EV to take off.
The fastest growth in EV sales has been in Europe: a compound annual growth rate of 60% from 2016 to 2020, compared with increases of 36% in China and 17% in the U.S
Another +point is this ETF have a very important company in it. Yes TESLA,
I like that this ETF included Tesla.
Tesla is not only a EV vehicle company, it also producers AI softwares, electric charging networks, lithium batteries, solar panels, home batteries, grid-scale storage products, drilling of tunnels, flame-throwers, Space-X Satellite …. etc. it is like a eco-system within itself.
(LIT) ETF can be bought at 1 share at NYSE, this really gives me the leeway of purchasing how many shares I like, in order to have available funds to diversify my portfolio investments in other industries as well.
I have position in this (LIT) ETF, which I bought at $66 and sold at $93 with a +40% profit capital gain. Now the price is at $84 which I have recently buy in gain.
Conclusion:
(EVFM EVS) mostly invest in China EVs and Lithium batteries manufacturers.
(LIT) invests in China too, but with a good percentage on U.S. too. Focus is on Lithium batteries manufacturers, but also included 2 major EV companies Tesla (US) and BYD (China).
I like (LIT) more because of Lithium Batt pure play, which still included Tesla and BYD. And as a small retail investor I am able to buy into it with small funds in US stock market without restriction of order of minimum of 100 shares or 1,000 shares per order.
And volume of trades in US stock exchange is more dynamic.
But I will not give (EVFM EVS) a miss too. This is the only exciting ETF stocks I see in SGX currently.
Hope that (EVFM EVS) minimum order can be lowered.
However, you’ll need to consider the trading volume of the stock as well. Trading on SGX is known for its low volume. Even though you place a buy bid, you can’t buy the stock if no one is selling it. And if you sell, you can’t sell if no one is buying it.
In recent times, retail investing has changed in a big way. In the past, retail investors would have to work through a financial advisor or other investment professional to make their trades.
Today, retail investors have the ability to download a user friendly online trading app on their mobile phone like Tiger Broker, MooMoo, Interactive Broker, Saxo Trader …. etc. to select their investments themselves and trade the stocks themselves.
Not only has this increased retail investor access to the stock market, but it has also largely reduced cost.
After all, a large percentage of online brokers app, don’t charge commissions, or charge only extremely low fees like $1.99 per trade associated with trading activities.
Saving on additional fees by cutting out the brokers or financial advisers.
As a result of these new technologies, there are more retail investors in the market now than ever before, doing their own research, executing their own trades, and changing the dynamic of the stock market as a whole.
Note Disclaimer:
This is solely an opinionated post, these are not facts. There may be inaccuracies at the point of writing and at the point of posting this article or comments. These Information are not intended to be and do not constitute financial advice, investment advice, trading advice or any other advice or recommendation of any sort.
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