Move over, Tesla; if Defiance ETFs has its way, new players in the industry are set to appear on the horizon thanks to its electric vehicle (EV)-centric exchange-traded fund (ETF) Solactive Pure US Electric Vehicle ETF.
Referred to as the Pure EV Index fund for short, this ETF offers a way by which investors could make concentrated bets into the booming EV sector.
According to Defiance ETFs chief information officer Sylvia Jablonski, many investors are taking on ETFs for exposure to the EV scene on top of other tech-sector stocks such as those from big players like Apple and Microsoft.
While Tesla remains the primary holding for many EV-focused ETFs, there are funds that hold stock in other upcoming or even established EV firms, as well as companies that produce components for EV manufacturing. Such funds include Global X autonomous and electric vehicles ETF, as well as KraneShare Electric Vehicles and Future Mobility ETF.
The Pure EV Index Fund itself is made up of stocks from the industry’s five largest firms in terms of market capitalization; namely Li Auto, Nio, Rivian, Tesla, and Xpeng. In doing so, the fund also gives investors exposure to the world’s biggest economies as two of the firms are from the United States and the remaining three are from China.
To determine which companies ought to be included in the fund, Defiance ETFs’ criteria clearly states that firms need to get around 50% of their annual revenue or operations from either developing or producing EVs, and their stocks need to have liquidity on top of high trading volume.
At present, the Pure EV Index Fund’s total value is now 18% higher than it was when it was initially launched in June of this year. Likewise, its total net assets are currently pegged at $5.1 million as of September.