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I'm an ETF Technical Analyst in a small financial firm in King of Prussia, PA.
  • First Lithium ETF by Global X 0 comments
    Jul 23, 2010 9:51 AM | about stocks: SIL, COPX, PALL, GLD, PPLT, PLTM, ECH, EWJ, JPXN, EWC, EWQ, EWA, FCHI, FXI, YAO, BRAZ, BRAQ

    Today, Global X has released the first lithium ETF (LIT) which aims to track the Solactive Global Lithium Index.  This ETF, like other Global X precious metal ETFs (SIL, COPX) does not track the spot price of the underlying commodity, since, in this case, there is none, unlike other precious metal ETF’s (PALL, GLD, PPLT).   Since it is impossible or difficult to invest in specific areas of the market like lithium or platinum (PLTM), it is only natural that an index would be created to monitor the performance of the companies in the industry.  The underlying index is therefore the lithium industry, 51% of the index are lithium and mining companies, the other 49% are lithium-ion batteries firms.  More importantly, the index provides slight global exposure, with the majority of the companies being U.S based but also Chile(ECH), Japan(EWJ, ITF), Canada(EWC), France(EWQ), Australia(EWA), and China (FCHI, FXI, YAO). 

    The crux of the matter is that lithium has the potential to be a lucrative investment.  In the growing need to have cars that don’t produce carbon emissions like in the case of the hybrid, or just a car that runs off electricity, there will be more of a demand for batteries, thus generating more profits for the lithium companies.  Lithium has several additional uses beyond being the functioning component of a lithium battery.  Lithium, since it has the highest specific heat of any solid element, is used in several different applications involving high heat, such as nuclear applications or high-temperature lubricants[1].

    Global X has also recently issued BRAZ, BRAQ, SIL, and COPX, all of which have been successful in attracting both assets and volume, as well as presenting the opportunity to invest in a market that is more difficult to reach.


    Disclosure: No Positions
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