Global X Lithium & Battery Tech ETF

LIT

Market cap $1.32B

Artificial intelligence (AI), cloud computing, and machine learning are just a few of the obvious tech innovations dominating the majority of investor attention spans these days. Along with the companies focused on these technologies, attention also diverts to those integral to meeting hardware demands, like semiconductor firms.

The global electric vehicle market remains highly competitive, with China as the dominant region and the U.S. seeing a temporary Q3 boost from expiring tax credits. BYD Company Limited leads in global EV sales but saw a rare year-over-year decline in Q3, mainly due to intense competition in China, though exports are surging. Xiaomi is emerging as a standout, rapidly scaling EV sales and maintaining strong momentum despite being a newcomer and not an EV pure-play.

Lithium-themed ETFs touched 52-week highs last week, prompting questions on if the rally is driven more by political tailwinds than commodity fundamentals.

LIT surges 78.9% from its low to a 52-week high as lithium demand fuel momentum in battery metal miners.

BWET, GOEX, SLVP, LIT and BBC stood out as last week's best-performing ETFs, driven by sector-specific fundamentals, safe-haven demand and Fed rate cut hopes.

BWET, GOEX, SLVP, LIT and BBC stood out as last week's best-performing ETFs, driven by sector-specific fundamentals, safe-haven demand and Fed rate cut hopes.

The supply of metal used for electric vehicles and computer batteries has been growing, but stocks of lithium companies are rallying as another mine shuts down.

This summer has brought a renewed focus on alternative assets. Investors are rotating into gold, other precious metals, bitcoin, and option-based strategies.

LIT surged to a new 52-week high, up 56.2% from its low, fueled by rising demand for energy transition minerals.

I recommend selling the Global X Lithium & Battery Tech ETF due to poor 5-year returns and disappointing lithium sector fundamentals. Lithium prices have plummeted 89% since 2022, driven by oversupply and slower-than-expected EV adoption, undermining the ETF's investment case. Valuation remains unattractive despite weak sector prospects and downward revisions in EV growth forecasts.