Looking to play the global energy transition while diversifying with global equities? Few areas are offering as much excitement right now as China’s EV industry. The country’s electric vehicle industry has seen its companies outpace foreign rivals, producing vehicles as much as 30% faster than automakers in other countries. With China’s EV landscape a bright spot, it may be worth taking a look at an EV ETF like the KraneShares Electric Vehicles & Future Mobility Index ETF (KARS ).
See more: Tap Into China AI Boom With This ETF
KARS allocates nearly one-third of its holdings to Chinese EV firms. It tracks the Bloomberg Electric Vehicles Index for a 72 basis point fee. The ETF looks for firms that derive significant revenues from EVs, energy storage, lithium and copper mining, and other EV-related industries.
Perhaps most intriguing about its approach, however, may be its focus on firms working in autonomous navigation technology, for example. As recent reporting from the Wall Street Journal emphasizes NIO (NIO), an EV company in China, outpaces rivals in part because it produces cars with a spar chip that allow faster software updates. Advantages like that can help EV firms stand out in an increasingly competitive landscape.
KARS holds NIO as well as many other key players in the space. Over the last month, it has returned 11.2%, outperforming both its ETF Database Category and FactSet Segment averages. Over the last five years, it has outperformed the latter, returning 4.2% in that time.
So, for investors looking to combine the global energy transition with some degree of diversification away from the U.S., KARS can appeal. China overall has disappointed somewhat for investors. KARS, however, provides exposure to a bright spot thanks to its EV ETF approach.
For more news, information, and analysis, visit the China Insights Channel.
