In a world defined by rampant energy demand and electrification, battery tech is one of the more intriguing places to invest. While attention has turned to the big AI narratives and debates in the market, tech categories like battery innovation have plenty of opportunities. Indeed, those AI firms need energy infrastructure like batteries to deliver. Is now the time, then, for battery tech funds like the Amplify Lithium & Battery Technology ETF (BATT)?
Key Takeaways:
- As investors look for opportunities to limit concentration risk, battery tech can appeal.
- The category benefits from knock-on AI impacts like energy demand and data center construction.
- Meanwhile, it gets exposure to broad grid and utilities upgrades globally.
BATT charges a 59 basis point fee, tracking the EQM Lithium & Battery Technology Index. The index includes battery material firms, producing minerals like cobalt, nickel, graphite, and lithium. The index qualifies firms for inclusion if they generate at least 50% of revenue from mining, production, processing, recycling and other tasks in that chain. The strategy can also include firms deriving at least 90% of revenue from electric car companies.
The battery tech ETF has returned 13.5% over the last three years per ETF Database data. That outperformed the ETF Database Commodity Producers Equities category average for that period. The average came in at 10.8% as of October 6.
Why might now be the time to capitalize on battery tech in an ETF like BATT? There are a few major reasons. Firstly, the price of lithium may be poised to stabilize. While the price of lithium is now back down to where it was at the start of the year, it is still higher than its lowest point in 2023.
