Introduction

Global X offers another valuable ETF option in the lithium industry, especially with the significant investments the U.S. government has made in the clean technology sector recently.

The Global X Lithium & Battery Tech ETF (LIT) holds notable positions in major industry players like Albemarle (9.6% of the portfolio), Tesla (4%), and Mineral Resources (4.4%). These companies have been beneficiaries of the financial support allocated through recent legislative acts like the CHIPS and Science Act and the Inflation Reduction Act.

ETFs such as LIT can offer diversification across various parts of the lithium supply chain, serving as a buffer against fluctuations in lithium prices. For instance, a drop in prices may impact producers negatively but can be advantageous for companies utilizing lithium in manufacturing value-added products.

With holdings in mining, refining, and battery production firms, particularly with a strong presence in China (37% of fund exposure) and the U.S. (21%), Global X provides exposure to different sectors of the lithium industry, transcending conventional sector and geographical boundaries as stated on the fund's website.

Conclusion

Investing in lithium ETFs presents an opportunity to participate in a fast-growing sector, which is considered by Tesla CEO Elon Musk as the "new oil."The ETF carries an expense ratio of 0.75%.