ETF Securities (ETFS) has today listed an exchange-traded fund (ETF) that will provide investors, including SMSFs, with access to companies directly involved in the global energy revolution.
The ETFS Battery Technology and Lithium ETF (ACDC) tracks the performance of battery technology stocks and four lithium producers.
ETFS Australia chief executive Kris Walesby said energy storage is undergoing a massive transformation in Australia and the rest of the world, with lithium considered to be one of the lightest and most efficient technologies.
Walesby added battery technology has advanced dramatically and is causing a structural shift in energy use, both in terms of storage and the drive towards cleaner and more efficient energy.
He noted the global market for advanced battery materials is expected to increase by 50 per cent to about US$33 billion in the next four years.
“ACDC has been designed with SMSF investors as a core focus,” he told selfmanagedsuper.
“The reason for this is because investing in disruptive technologies carries risks and one of the best ways to mitigate that risk is by investing in a number of companies focused on the theme rather than taking stock-specific bets. Diversifying across the theme is a shrewd tactic in investing.
“ACDC is particularly interesting as Australia is at the forefront of battery technology projects as we see with Tesla’s tie up with the South Australian government, as well as having a populace increasingly focused on a ‘greener’ world, which the rapid increase in electric cars will be a big part of.
“Having access to mega-trends of this type, which ETFS has provided via ACDC, but also in the wider Future Present range, which includes robotics and tech, is a boon for SMSF investors as these are global funds but listed in Australia, available for purchase in Australian dollars and can be bought for under $100 per unit.”
The new ETF provides investors with exposure to 28 stocks from five sectors that include lithium producers such as Australia’s Orocobre, battery producer Samsung SDI, electric vehicle pioneer and battery producer Tesla and industrial specialist Toshiba.
In addition to lithium, the ETF will include exposure to lead, nickel, sodium and zinc batteries, and its basket of stocks will be reassessed as other battery technologies, such as hydrogen, emerge over the longer term.
ACDC is benchmarked against the Solactive Battery Value-Chain Index, which has delivered a return of 15 per cent a year over the past five years.
“While the humble battery hasn’t changed that much in years, we’re on the cusp of a power revolution,” Walesby said.
“Some notable as well as some less-known, but highly focused companies are working hard to make their mark early, with many investors keen to get on board when they can.”
