A Fast Start For This Electric Vehicle ETF

The Global X Autonomous & Electric Vehicles ETF DRIV is just over a month old, but the latest exchange-traded fund tapping into the autonomous and electric vehicle themes is already gathering traction among investors.

DRIV, which tracks the Solactive Autonomous & Electric Vehicles Index, provides exposure to “companies involved in the development of autonomous vehicle software and hardware, as well as companies that produce EVs, EV components such as lithium batteries, and critical EV materials such as lithium and cobalt,” according to Global X.

What Happened

Several other autonomous and electric vehicle ETFs beat DRIV to market, but data indicate the Global X fund is carving out a niche for itself.

When it debuted, DRIV was the third electric vehicle ETF to come to market; In just over a month on the market, the Global X fund has nearly $53 million in assets under management, making it easily the largest ETF in this niche.

Why It's Important

“While still early in their development and adoption, autonomous and electric vehicles are rapidly advancing and appear poised to trigger the transportation industry’s largest shakeup in over a century,” according to Global X research.

Said differently, the expected electric vehicle boom is expected to be so intense that the market may be able to support DRIV and one or more other credible competitors. Remember that the Global X Lithium & Battery Tech ETF LIT, itself a play on electric vehicles, debuted seven years ago and today has over $1 billion in assets under management.

“Electric vehicles trade in the traditional internal combustion engine (ICE) in favor of a hybrid, or fully electric motors, often powered by on-board batteries or hydrogen fuel cells,” according to Global X. “EVs have various advantages over ICE vehicles (ICEVs), including cheaper fuel, lower maintenance costs, and less air pollution.”

What's Next

DRIV is sector agnostic, but the fund allocates about three-quarters of its combined weight to the technology and consumer discretionary sectors.

While those sector allocations are sensible, it gives DRIV the feel of a growth ETF, many of which feature annual fees well below the 0.68 percent charged by DRIV. The same is true of many traditional tech and consumer ETFs, most of which feature many of the stocks held in DRIV.

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