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With ASX lithium shares soaring, why is the ACDC ETF down 9% in 2022?


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The Global X Battery Tech & Lithium ETF (ASX: ACDC) closed Thursday’s session up 1.24% to $88.28.

But until now for 2022 exchange traded fund (ETF) down 8.65%, which may seem surprising given that this year is shaping up to be another bumpy one ASX lithium shares.

Let’s look at some examples among the rip-nosers of this particular ASX mining segment.

  • The Core Lithium Ltd (ASX: CXO) share price up 119% YTD (YTD)
  • The Sayona Mining Ltd (ASX: SO) share price is up 86% year-to-date
  • The Pilbara Minerals Ltd (ASX: please) share price has risen by 45% since the beginning of the year
  • The IGO Ltd (ASX: IGO) share price has increased by 37% since the beginning of the year
  • The Allkem Ltd (ASX: AKE) share price is up 29% year-to-date.

Why is the ACDC ETF in the red in 2022?

The first thing to understand is that the Global X Battery Tech & Lithium ETF is not a pure-play lithium ETF.

It has some ASX lithium stocks but also invests in global companies. And not only those engaged in lithium mining. It contains companies involved in battery technologies such as electric vehicles (EVs). Tesla Inc (NASDAQ: TSLA), and car manufacturers who also build electric cars, e.g Renault SA (FRA: RNL).

The provider, Global X ETFs Australia, puts it this way:

ACDC invests in companies throughout the lithium cycle, including mining, refining and battery manufacturing, covering traditional sectors and geographies.

Therefore, your stock in ACDC will be affected by many factors other than the record price of lithium. This is the main thing that has driven the ASX lithium share price over the past two years.

So that’s one reason the ACDC ETF isn’t going gangbusters like many ASX-listed stocks.

Why invest in ACDC ETF?

The ACDC ETF is popular with ASX investors who want to capitalize on a global investment in the energy transition but don’t want to choose individual stocks to invest in. The problem is that when you buy a basket of international shares and ASX shares, you have to take the good with the bad.

As with any stock portfolio, you will have winners and losers every year. Losers are not necessarily bad companies, but every company has good years and bad years, and that will be reflected in their stock price.

This is especially true for young companies that are in the initial phase of growth. Remember that global demand for lithium on the back of demand for electric vehicles is a fairly recent phenomenon. Just 10 years ago, Tesla was a small cap. Just five years ago, this stock was worth US$20 (today it is 11 times more).

However, if you think the lithium and battery theme is going to continue, then the Global X Battery Tech & Lithium ETF could be a good place to be. Especially if you don’t like big swings in stock prices. By its nature, a basket of stocks will not react as strongly to individual news about its 31 stocks.

ACDC ETF has a 52-week high of $99.25 and a 52-week low of $74.72. So it’s currently trading in the middle of that range.

What shares of ASX lithium does the ACDC ETF hold?

According to provider Global X ETFs Australia, the top six holdings are as follows. As you will notice, there are only three listed on the ASX. It is also the only ASX lithium stock held by the ACDC ETF.

  1. Pilbara Minerals with a weight of 6.83%
  2. Renault with a weight of 5.19%
  3. Minerals Resources Limited (ASX: MIN) with a weight of 4.94%
  4. LG energy solution Ltd (KRX: 373220) with a weight of 4.61%
  5. Livent Corp (NYSE: LTHM) with a weight of 4.48%
  6. Allkem with a focus of 4.44%.


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