Finally, an ETF for lithium has arrived and it may be the best way to play the electric car revolution in the coming years, not to mention the increasing demand for cell phones, portable computers and many other devices that rely on lithium batteries. The Global X Lithium ETF (LIT) may prove to be a good diversified way to play the lithium boom with it spread fairly evenly across lithium miners and lithium battery makers. Here’s a shot of the top holdings of the ETF:
You see the Chilean miner Sociedad Quimica (SQM) at about 20% of the fund which isn’t a surprise considering it’s the most well known lithium miner and largest worldwide producer. Forbes once called Chile the Saudi Arabia of lithium and SQM is the leader there. However, it should be noted that the three top holdings aren’t exactly lithium mining pure plays. But you didn’t expect this ETF to be perfect did you? Of course not! No ETF is. All in all, I’d say it’s a good mix of mining and battery plays across the globe.
The lithium ETF began trading July 23rd and moved up nearly 10% right out of the gates before pulling back a bit today. It already has good liquidity and will likely remain popular considering it’s the only lithium ETF currently available. Expect competition soon.