Why Global X Lithium & Battery Tech ETF is Best Lithium Industry Tracking ETF

The demand for lithium has increased significantly during the last decade as it has become key for the development of industrial products, especially batteries for electronic devices and electric vehicles. In June 2021, U.S. National Security Advisor Jake Sullivan and National Economic Council Director Brian Deese issued their report in response to President Biden’s Executive Order 14017. The report declared lithium “essential” to U.S. economic security, and “critical” to U.S. national security. Global demand for lithium is expected to grow 4,000% by 2040.

Global X Lithium & Battery Tech ETF (LIT) is an exchange traded fund that enables investors to get exposure to the lithium and battery industry effortlessly while reducing individual companies’ risk, including by diversifying geopolitical risks. This ETF continues to successfully rotate along the most promising lithium and battery producers from all over the world. While its international exposure reduces collective risk, its proportionally large China exposure is still among the biggest concerns.

LIT by Global X recently touched its all-time high of $92.66 in as the ETF continues to rise on the back of surging EV demand for lithium batteries. LIT has been trending upward for months, as the fund is +49% YTD and +114% over a one-year period.

Among ETFs specializing in the lithium and battery industry, LIT continues to be the best performer. Its closest competitor, Amplify Lithium & Battery ETF (BATT), advanced just slightly over 80% over the same period due to a slightly different allocation of securities. Most importantly, unlike LIT, BATT's largest holding is Tesla, followed by Contemporary Amperex and BYD.

Albemarle Corporation (ALB): Being by far the largest holding of the LIT ETF with a weight of nearly 14%, the U.S based company develops, manufactures, and markets hi-tech specialty chemicals. The company's three main segments include Lithium, Advanced Materials, and Refining solutions. The company, with its joint ventures, operates 31 production and research facilities around the world. As demand for lithium steadily increases, high investor demand for shares has pushed the stock up 148% YoY.

We expect Global X Lithium & Battery Tech ETF to remain one of our top portfolio picks going forward.