Investors looking for a way to tap the electric vehicle boom via exchange traded funds have their fund. The KraneShares
Electric Vehicles & Future Mobility ETF (NYSE:KARS) debuted last week.
The KraneShares Electric Vehicles & Future Mobility ETF is something of a departure for New York-based KraneShares, an ETF
issuer known primarily for its lineup of China and emerging markets offerings. Popular KraneShares ETFs include the KraneShares
CSI China Internet ETF (NASDAQ: KWEB) and the
KraneShares Bosera MSCI China A Share ETF (NYSE: KBA).
KARS tracks the Solactive Electric Vehicles and Future Mobility Index. That benchmark “is designed to track the performance of
companies engaged in the production of electric vehicles and/or their components, or engaged in other initiatives that may change
the future of mobility,” according to KraneShares.
The Future Is Now
While electric vehicle demand is surging, that theme is expected to be durable for years. Coupled with the expected autonomous
vehicle boom, KARS could be a way for investors to play the future of the automotive industry right now.
“The shift toward future mobility technologies is occurring rapidly. 54 percent of new car sales and 33 percent of the global
car fleet are projected to be electric by 2040,” said KraneShares. “The global electric
vehicle market is projected to command $2.7 trillion of total investment before 2040. Autonomous vehicles and the resulting
'passenger economy' are projected to generate a cumulative $8 trillion in global service revenues by 2050.”
As China is the world's largest electric vehicle market, KARS features access to Chinese stocks, including those listed on the
mainland, also known as A-shares.
Familiar Names
The top 10 holdings in KARS, which combine for nearly 36 percent of the new ETF's weight, include plenty of familiar automotive
and technology stocks. Six of KARS' top 10 holdings are pure play automotive stocks including Tesla Inc. (NASDAQ: TSLA), Ford Motor Company (NYSE: F) and General Motors Company (NYSE: GM).
Technology companies in the new ETF's lineup include Nvidia Corporation (NASDAQ: NVDA), Alphabet Inc. (NASDAQ: GOOG) and Texas Instruments Inc. (NASDAQ: TXN).
KARS charges 0.69 percent per year, or $69 on a $10,000 investment.
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