Hello, ETF fans. Mike here with a “Quick Hitter” video. Yesterday, as we can see by our daily review and preview headline, was a sea of red across the markets. But one of the great things about thematic ETFs is there’s always something that went up.
Summary: A Bright Spot in Thematic Metals
As I was reading through the review and preview report, something caught my attention when I got to The Global Thematic section. The Global X Lithium & Battery Tech (LIT) managed to produce a nice 2.21% return yesterday, along with the VanEck Rare Earth/Strategic Metals ETF (REMX). I thought I’d hop into that category and take a look under the hood to see what companies were driving that return.
Drilling Down: Natural Resources & Battery Metals
If you click on our global thematic link, it takes you to the dashboard with our 12 thematic categories. These ETFs live in the Natural Resources category, which has several subgroups. The largest is Uranium & Nuclear, but the one we’re looking at is “Tech and Battery Metals,” which is where both LIT and REMX live. They are actually the two largest ETFs in that specific category.
A Look Under the Hood: The Portfolio Visualizer
To illustrate how different these strategies can be, I loaded all the ETFs from this subgroup into our Portfolio Visualizer. You can see some have hardly any overlap at all (a lot of green), while others have quite a bit in common (red or lighter green). It’s not uncommon for a thematic category to have a lot of differences, even with similar stated objectives.
Since LIT was the leader yesterday, let’s hop into that portfolio. I’m now moving into a premium tool, our Portfolio Visualizer, which you can unlock for $29 a month. This tool gives you all the look-through analysis on the holdings inside a portfolio.
What’s Driving LIT?
Inside the visualizer, we can see LIT has 38 companies and a large weighted average market cap of $94 billion. It gets put in Natural Resources because Materials is its largest sector at 52%, followed by Industrials at 22%. It also holds some Consumer Discretionary, like EV companies Tesla or Lucid.
If we group the portfolio by country, we can see China was a big driver of those positive returns yesterday. China as a whole did well, but this subcategory did quite well.
One of my favorite features here is the ability to understand the holdings. If I’m going through and see a name I don’t know, like Samsung SDI Company out of South Korea, I can simply click on it. The tool takes me to the single stock frame, and I can see right in the first sentence why it’s in this portfolio: they “manufacture and sale of lithium-ion secondary batteries.” It fits the theme perfectly.
The Workflow
That’s the beauty of the workflow: going from the daily note, to the ETF, and then drilling down to the underlying companies. I just thought I’d highlight that today because, why not be positive after a day like yesterday.
Hope you all have a great weekend.
Disclosures
This material is for informational purposes only and should not be considered investment advice. All investments, including ETFs, involve risk, including the possible loss of principal. Investors should consider their investment objectives, risks, charges, and expenses carefully before investing.
This analysis was developed by the team at ETF Action. We leverage advanced AI tools to assist in the drafting and refinement of our content, based on our expert prompts, direction, and final review.
