Back ten years ago, perhaps not many people could imagine that the automobile industry, which seems to be able to belong to the "traditional industry", seems to be so lively in the past two years. Yes, could you think of it at that time? In addition to traditional automobile giants, all kinds of companies and all kinds of capital are ready to cross-border into this industry. Among them, the two most popular technical points are "electric" and "unmanned driving". The former tries to change its power technology, while the latter tries to change its handling mode. Under this craze, various capitals are also moving. In addition to the primary market, the secondary market is also extremely lively. Tesla once soared with the electric concept, but as more competitors join, they are under pressure. Perhaps, in the field of electric vehicles, you can look at the front end of the industrial chain, such as how electric vehicles rely on to drive and batteries, and this industry also benefits fully. If this field is too professional for you and feels that you can't start, then the old rules are, look at industry ETFs, and there are really products in this field.
Global X, a famous American alternative ETF publisher, released a "lithium" theme ETF as early as 2010: The Global X Lithium ETF, with the code LIT. This ETF is misleading in its name, which makes people think that this is a commodity ETF that invests in lithium ore related futures? Actually, no, this is a stock ETF, a company that mainly invests in lithium mining and lithium battery businesses. To illustrate the problem, we will not follow the past routine today, first look at the holdings .
can be seen that this is an ETF that supports highly concentrated positions, and the first two companies account for one-third of their positions. Among them, FMC accounts for 22% of its position, which shows its position in the lithium industry. Yes, this company actually has a long history and a wide range of businesses, but now, the lithium industry has become its biggest theme. At the same time, this is also a fund that is deployed in the global lithium industry. We can see the figure of BYD .
From the perspective of regional distribution, it is indeed very wide.
Due to the market distribution across countries, the fee rate of this ETF is slightly higher, reaching 0.75%, and the dividend is not high. The annual dividend rate calculated in the past 30 days is only 0.57%, and it is divided once a year. This type of ETF still needs to grasp the trend and make money from its stock price trend. At the same time, we can also see that this ETF has a relatively concentrated position, which also increases the risk. To put it bluntly, once the trend is properly grasped and the leading stocks start, they can make a good profit, but once the trend changes, they may fall badly, so they are considered a product with higher risk.
So what is the situation in the near future? Overall, it has been a hot spot in the near future. Everyone can feel that electric cars are too popular when reading the news. The super factory Tesla is preparing to build is said to theoretically be difficult for the current industry to supply the demand for lithium.
Overall, in the past year, the price of lithium has been in a rocket-like surge. One thing to note here is that this situation is actually a double-edged sword for lithium battery manufacturers. After all, it is impossible to completely pass on the rise in raw material prices to downstream manufacturers. Of course, after all, this reflects the expansion of demand. Due to costs, price increases are of course, but it is impossible to ultimately produce as much benefits as the price increase of lithium itself.
From the demand side, the demand for lithium batteries themselves, which are eager to try in the electric vehicle field will continue to grow. We can also see that although Tesla was a star company in the industry in the past, the real explosion of the industry was in 2016 when more players joined.
, and just recent performance, LIT performed well:
, you can see that the blue line LIT has a profit of 30.62% in the past year, which is much higher than the 9.25% of the S&P 500. Judging from the current situation, the lithium industry trend seems to have not faded yet, and there is still room for continued rise in the future. After all, the electric vehicle industry is still in its early stages, and there are basically no serious problems in technology. It is more about business models and cost reductions, so good days may be ahead. What's more, don't forget that in the electronic products industry, lithium is also used in many industries, and the market breadth is still very large.
Of course, we must also pay attention to risks. When any industry is booming, especially when supply is in short supply, according to market rules, we all know that the next step is to expand production capacity (after all, the lithium industry does not have OPEC), and capital is influx, and the same is true for its downstream electric vehicle industry. In this way, it is not ruled out that the market will overheat or even burst in the middle, resulting in overcapacity, industrial depression, or not to such a serious level, which will also lead to fierce market fluctuations and cause losses to investors.
Let us see the trend since the release of this LIT ETF. As shown in the blue line, in fact, after reaching its high point in 2011, the overall situation was downward and fluctuating continuously in the middle. The recent rise in stock prices is another upward cycle, but the risks still exist. Of course, we also need to note that this rise is different from the previous rebounds, that is, the increase in trading volume.
In fact, LIT has not been an active and popular ETF for a long time, and its capital scale has just exceeded US$100 million, but its momentum is quite strong, and it has received a net inflow of US$57 million this year. In theory, the lithium industry continues to perform well, and the ETF is expected to continue to absorb more funds. As the scale expands, it will further dispel some investors who are interested in investing but are worried about liquidity, forming a stronger scale growth effect. Of course, the lithium industry, an industry that has been favored in the medium and long term, is currently considered by many investors to be more fragile and has a high short-term risk. Combining its scale and liquidity considerations, this ETF is very suitable for individual investors who are optimistic about the lithium industry and participate in small-scale investments as part of the investment portfolio.
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