One of the themes of 2022 was the collapse in the share price of Tesla (Nasdaq code: TSLA) as it lost around 65% in 2022.
But electric vehicles (EVs) are not going away and the trend of moving to EVs from internal combustion engine (ICE) vehicles continues. A recent Citi report does see slower take up in EVs but by 2030 they expect global EV penetration to be ±45%.
So we went looking for an ETF that could track this trend and one concern was Tesla, the stock is still expensive and while the competition is late, it is coming thick and fast. We also wanted more than just vehicle manufacturers, we wanted lots of backend EV production and manufacturing in the ETF.
The KraneShares Electric Vehicles And Future Mobility Index ETF (NYSE code KARS) fits the bill in that it focuses on not only the production but also the components that go into EVs. This includes autonomous driving, shared mobility, lithium and/or copper production, lithium-ion/lead acid batteries, hydrogen fuel cell manufacturing, and electric infrastructure businesses.
One of the benefits of investing in KARS is that it provides exposure to a specific and fast-growing sector of the market. EVs and other forms of future transportation are becoming increasingly important as countries, companies and individuals are looking to reduce their carbon footprint and dependence on fossil fuels.
Importantly to some, Tesla is in the ETF, but at 11th position and at a weighting of only 2.78%.
There are 75 stocks in total in the ETF with the highest weighting at under 5% and I like both of those features. There is also a lot of exposure to China, currently the world’s biggest EV market.
Top ten holdings
Area of operation
|SAMSUNG SDI CO||Battery and electronic materials||3.97%|
|APTIV PLC||Designs, manufactures and assembles the electrical architecture of vehicles||3.90%|
|PANASONIC||Development of diverse electronics technologies and solutions||3.79%|
|NIDEC||Manufacturer and distributor of electric motors||3.53%|
|ALBEMARLE||Lithium, bromine specialities and catalysts manufacturing company||3.36%|
|GEELY AUTOMOBILE||Chinese multinational automotive company||3.10%|
|LI AUTO||Designs, develops, manufactures, and sells premium smart electric vehicles||3.00%|
|BYD CO||Specialises in car-making and manufacturing of rechargeable batteries||2.95%|
|UMICORE||Materials technology company||2.93%|
ETF listing details and returns
|ETF name||KraneShares Electric Vehicles & Future Mobility Index ETF|
|Issue date||18 January 2018|
|Total investment cost||0.7%|
|ETF Benchmark||Bloomberg Electric Vehicles Index|
|Tax-free savings account||NO|
|Performance 1 year||-35%|
|Performance 3 years||+31%|
|Performance since listing||+31%|
At Just One Lap, we are big fans of passive investment using ETFs. In this weekly blog, we discuss ETFs on the local market and the factors you need to consider when choosing an ETF. If you have wondered how one ETF differs from another, this is where you can find out. We explain which index each ETF tracks, what type of portfolio could benefit from holding each ETF, and how the costs will affect your bottom line.