The Global X Autonomous & Electric Vehicles ETF [DRIV] is up 95.2% over the past year, from $ 14.51 on June 30, 2020 to $ 28.31 on June 30, 2021.
The fund was driven by increasing demand for electric and autonomous vehicles from both consumers and businesses alike as they strive to meet the carbon reduction targets to combat global warming.
The Global X Autonomous & Electric Vehicles ETF had hit a 52-week high of $ 28.91 during intraday trading on February 16. However, by close of trading on May 12, the fund fell to $ 25.50.
The Global X Autonomous & Electric Vehicles ETF has since rebounded, trading at $ 28.07 on July 9, up 17.4% year-to-date.
95.2%
The returns on the Global X Autonomous & Electric Vehicles ETF have risen over the past year
Ahead of the pack
The Global X Autonomous & Electric Vehicles ETF, launched on April 13, 2018, invests in companies involved in the development of electric vehicles (EV) and autonomous vehicle technology.
This includes vehicle software and hardware, as well as companies that make EV components such as lithium batteries and critical EV materials such as lithium and cobalt.
Global X notes that while worldwide EV registrations increased more than 40% in 2020, EV accounted for less than 5% of new vehicles sold, suggesting significant room for further adoption.
The Global X Autonomous & Electric Vehicles ETF achieved a total daily return of 15.32% on July 12, according to Yahoo Finance. As of July 9, the fund had total net assets of $ 969.2 million.
$ 969.2million
Valuation of the assets of the Global X Autonomous & Electric Vehicles ETF
The fund had 76 holdings with Nvidia Corporation as of July 12 [NVDA] the largest weighting at 4.26%. alphabet [GOOGL] follows with 4.15%, followed by Microsoft [MSFT] with 3.72%, apple [AAPL] with 3.21% and Toyota [7203.T] with 3.11%. Other holdings are Qualcomm [QCOM], Tesla [TSLA], NXP Semiconductors [NXPI] and Volkswagen [Vow3.DE].
Nvidia’s shares are up 99.5% in the year ended July 9. It was created through a new partnership with the Chinese electric vehicle manufacturer Nio. supported [NIO] for the use of his supercomputer Nvidia DRIVE Orin for a new generation of automated electric vehicles.
Meanwhile, Microsoft’s shares rose 34.2% over the past year (through July 9). It was supported by a new partnership with General Motors [GM] and the self-driving EV developer Cruise to use its cloud computing software Azure.
Volkswagen, whose owner Stellantis recently outlined a € 30 billion plan to electrify its vehicle range and 500 to 800 kilometers on a single charge, has also stepped on the gas. Volkswagen has announced that 70% of its total European sales will be battery-electric by 2030.
UBS forecasts similar growth across the industry, saying that new cars will be 20% electric by 2025 and 50% electric by 2030. Cheeky but possibly accurate, she added, “100% by 2040?
For autonomous vehicles, the self-driving car market will grow in value from $ 20.97 billion in 2020 to $ 61.93 billion in 2026, according to Mordor Intelligence.
“Recent technological advances in artificial intelligence, machine learning and computer vision have enabled manufacturers to improve the self-driving capabilities of cars,” it said.
“The recent technological advances in artificial intelligence, machine learning and computer vision have enabled manufacturers to improve the self-driving capabilities of cars” – Mordor Intelligence
A greener future
Specifically, the EV market will be boosted by governments around the world increasing investment in green and clean energy as nations recover from the COVID-19 pandemic. The European Commission’s Green Deal calls for more electric vehicles and charging stations to meet its goal of reducing CO2 emissions from cars by 2030.
US President Joe Biden is also committed to electric vehicles and plans to spend $ 7.5 billion on building a national charging network.
There are challenges, however, such as public engagement for EVs given concerns about charging capabilities and upfront costs. The ongoing shortage of semiconductor chips could be another flaw in the factories. Can supply keep pace with demand?
Writing in Seeking Alpha, Khen Elazar fears the “volatility” associated with EV stocks. “It’s a new and disruptive technology that still requires massive investment, and companies in the industry are either making very little money or [are] They still lose money every year because they invest heavily in their products. “
“It’s a new and disruptive technology that still requires massive investment, and companies in the industry are either making very little money or [are] They still lose money every year as they invest heavily in their products. ”- Khen Elazar
He believes the Global X Autonomous & Electric Vehicles ETF is the best vehicle to take advantage of the EV boom. “We’re seeing more and more electric cars, and that’s a global trend. We see it in China and Europe as well as the US. Governments welcome the change and it will last, ”he says. “DRIV is a good investment vehicle for those interested in diversified exposure across the sector.”
Disclaimer of liability Past performance is not a reliable indicator of future results.
CMC Markets is an execution-only service provider. The material (whether it contains opinions or not) is for general informational purposes only and does not take into account your personal circumstances or goals. Nothing in this material is (or should be viewed as such) financial, investment, or other advice to be relied upon. No opinion expressed in the material constitutes a recommendation by CMC Markets or the author that any particular investment, security, transaction, or investment strategy is appropriate for any particular person.
The material was not prepared in accordance with legal requirements to promote the independence of investment research. While we are not specifically prevented from acting prior to the provision of this material, we do not attempt to use the material prior to its distribution.
CMC Markets does not endorse or give any opinion on the trading strategies used by the author. Your trading strategies do not guarantee any return and CMC Markets will not be responsible for any losses you may suffer, directly or indirectly, from any investment based on the information contained herein.
* Tax treatment will vary based on individual circumstances and may change or differ in a jurisdiction other than the UK.
Read on for FREE
Success! You have successfully logged in.
