The ETF of the Driverless Car Revolution

Investors seeking to participate in the driverless car revolution can now choose to purchase exchange-traded funds (ETFs) dedicated to driverless cars, electric vehicles, and other innovations in the automotive industry.

Such ETFs include KraneShares Electric Vehicles and Future Mobility ETF (KARS), which debuted in January 2018; InnovationShares NextGen Vehicle and Technology ETF (EKAR); Global X Autonomous & Electric Vehicles ETF (DRIV), which debuted in February 2018 ) Debuted in April 2018. An ETF focuses on the automotive industry.

Key points

  • Investors seeking to participate in the driverless car revolution can now choose to purchase exchange-traded funds (ETFs) dedicated to driverless cars, electric vehicles, and other innovations in the automotive industry.
  • KraneShares Electric Vehicles and Future Mobility ETF, InnovationShares NextGen Vehicle and Technology ETF and Global X Autonomous & Electric Vehicles ETF are ETFs that invest in innovations in driverless cars, electric vehicles and other automotive industries.
  • People who want to invest in driverless cars can also choose to add ETFs that focus on the automotive industry and related technological innovations to their portfolios, including First Trust’s Global Automotive Index Fund or ARK Invest’s Industrial Innovation ETF.

KraneShares Electric Vehicles and Future Mobility ETF

As of November 27, 2020, the net assets of KraneShares Electric Vehicles and Future Mobile ETFs were 57.74 million U.S. dollars.The fund tracks the performance of Solactive Electric Vehicles and Future Mobility Index, which includes global companies involved in new transportation methods. These companies focus on electric vehicles or their components, technologies related to autonomous driving, shared mobility, lithium and copper production, hydrogen fuel cell manufacturing, and other innovations in the industry.

Ideanomics next-generation automotive and technology ETF

Ideanomics NextGen Vehicle and Technology ETF is composed of global stocks related to electric autonomous driving or self-driving cars. The fund invests in four types of companies in the industry: battery manufacturers, original equipment manufacturers, suppliers, and semiconductor and software manufacturers. As of November 2020, the ETF’s net assets are US$4.22 million.

Global X Autonomous Driving and Electric Vehicle ETF

The Global X Autonomous Driving and Electric Vehicle ETF is designed to correspond to the Solactive Autonomous Driving and Electric Vehicle Index. The fund invests in companies engaged in the development and manufacturing of software and hardware for driverless cars, as well as companies that produce electric vehicles and their components (such as lithium and cobalt). As of November 2020, the fund’s net assets were US$124.9 million.

Related Exchange Traded Fund Options

People who want to invest in driverless cars can also choose to add ETFs to their portfolios that focus on the automotive industry and related technological innovations.

First Trust’s Global Automotive Index Fund (CARZ) was launched in 2011 and until 2018, it was the only ETF related to the automotive industry. As of July 2020, the fund’s net assets are US$44.35 million.The ETF tracks the Nasdaq OMX Global Automotive Index, which includes almost all major automakers in the world. Holding companies include Honda Motor Company (HMC), General Motors Company (GM), Toyota Motor Company (TM) and Tesla Inc. (TSLA).

Another broader investment option related to driverless cars is ARK Invest (ARKQ)’s industrial innovation ETF, which was launched in 2014 and has a net worth of US$633 million as of November 2020.This is an actively managed fund that invests in companies that are determined to benefit from technological advancement, including companies related to electric vehicles and self-driving cars. Software and IT service companies, semiconductor companies, and automotive companies together account for about 80% of portfolio assets.

ETF investors may also want to consider funds like First Trust Clean Edge Green Energy Index Fund (QCLN). The ETF was launched by First Trust in 2007 and focuses on companies that provide clean alternative energy. Although there is no direct connection with driverless cars, there is some significant overlap between companies involved in the development of driverless cars and companies involved in clean energy. The fund tracks the Nasdaq Clean Edge Green Energy Index, which is composed of U.S. listed companies engaged in clean energy development, and has net assets of US$1.5 billion as of November 2020.Semiconductor companies may be critical to the creation of driverless car technology, accounting for about one-third of the investment portfolio.

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