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Today is the first day of trading for the Global X Lithium ETF (LIT). Global X hopes to take...

Today is the first day of trading for the Global X Lithium ETF (LIT). Global X hopes to take advantage of rapidly growing demand for lithium batteries in hybrid and electric cars. According to the press release (pdf), 51% of the fund will be made up of battery manufacturers, with the remaining 49% made up of lithium miners and refiners. LIT will charge 0.75%; it has 20 components.
Comments (1)
  • GerryMC
    , contributor
    Comment (1) | Send Message
     
    Hi,

     

    I'm a financial novice but a lithium resources enthusiast just seen this fund. A thought on the miners -- the fund says SQM, FMC, Rockwood are lithium miners (more accurately brine harvesters as brine isn't mined and there's a world of relevant difference).

     

    Point is that for each of these companies lithium is a minority part of their business by far -- say around 20% -- although that will vary between each of them and with time as business evolves. These are far from pure lithium stocks -- I understand that the fund doesn't claim them to be but............ SQM's business is mainly agrichemical with potash the main product from where it also extracts lithium. FMC's and Rockwood's businesses are diversified chemical with FMC also a soda ash miner in Wyoming. So, the performance of these stocks relates to differing dynamics between them. Recently restructured, and far smaller, Talison Lithium is the only company 100% reliant on (and exposed to) its lithium resources and business for its future success at this time although several are entering right now -- Galaxy Resources, Rincon Lithium, Simbol Materials amongst a larger number in the pipeline and an enormous number in exploration and development.

     

    As for the battery makers what proportion of their business is lithium related. For all the fund members how realistic is it that the lithium component of their businesses actually translates to bottom line performance and therefore a bellweather for lithium investment. Does the fund somehow reflect all theabove by some sort of weighting or what?
    3 Apr 2011, 11:42 PM Reply Like
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