Is Anyone Investing in EV ETFs

[angelfly55]

I am thinking about investing in Electric Vehicle Etfs. Has anyone else taken the plung to do this?
https://www.fool.com/investing/stoc...implify Volt RoboCar Disruption and Tech ETF

 

[Spock]

You'll have to watch the holdings in the ETF you choose. I saw a graphic where Tesla makes up over 50% of the EV market, so depending on the weighting of the ETF you'll be basically buying Tesla similar to buying BRKB is buying an insurance company despite their other holdings. Tesla already has a market cap 2x as large as all the other name brand car makers combined.
Other suggested routes were to invest in the battery companies (I think the symbol was LIT), but that ETF went nowhere and was highly volatile... pretty much the same as investing in commodities. Though it probably went up after I sold it.

 

[njhowie]

As I was logging in to my Fidelity account this morning, theirs popped up on to my screen - FDRV...down 45% in 2022.

A quick check of their holdings show there is good diversification and not so heavy in Tesla. Though it is obviously almost entirely tech, and has suffered the same volatility as the tech sector. They have Tesla at 4.5% of holdings.

 

[arcyallen]

You'll have to watch the holdings in the ETF you choose. I saw a graphic where Tesla makes up over 50% of the EV market, so depending on the weighting of the ETF you'll be basically buying Tesla similar to buying BRKB is buying an insurance company despite their other holdings. Tesla already has a market cap 2x as large as all the other name brand car makers combined.

I think the gist of your message is spot on. Specifically for BRK, though: It's way more than "buying an insurance company". Apple stock alone accounts for a huge percentage of their market cap.

I am thinking about investing in Electric Vehicle Etfs. Has anyone else taken the plung to do this?

I have not, but behaviorally ETFs are tough to own as we want to buy and sell them at the wrong time. Buy and hold? I guess that could work if you really loved the idea of EVs. But even then, most automakers will be EV automakers soon. Will the ETFs focus on EV-exclusive automakers, or any of them? I think I'd pass in general on them, but can understand why you'd want to look into them.

 

[matjung]

I am invested into Cars that are doing Petrol, Diesel, Electric and Bio Fuels.
Regarding EV ETF. I see the risk that there are not too many stocks around to build a diversified ETF. Tesla might dominate that ETF for good and bad.

 

[Spock]

I think the gist of your message is spot on. Specifically for BRK, though: It's way more than "buying an insurance company". Apple stock alone accounts for a huge percentage of their market cap.


I have not, but behaviorally ETFs are tough to own as we want to buy and sell them at the wrong time. Buy and hold? I guess that could work if you really loved the idea of EVs. But even then, most automakers will be EV automakers soon. Will the ETFs focus on EV-exclusive automakers, or any of them? I think I'd pass in general on them, but can understand why you'd want to look into them.

Apple makes up 42ish% of Berkshire's stock holdings. But those numbers do not include the wholly owned subsidiary/companies that are part of BRK and not available on the stock market. If you divide the Apple holdings by the total assets Apple is about 12-13% of BRK (numbers are rough because I used latest years I could find, some might be 2021 vs. 2022, etc).

 

[Zathras]

I am thinking about investing in Electric Vehicle Etfs. Has anyone else taken the plung to do this?
https://www.fool.com/investing/stoc...implify Volt RoboCar Disruption and Tech ETF

EVs are a highly disruptive market. More start-ups will fail, than succeed.
In addition, the ride will be a very bumpy one.

I suspect that an ETF will have as many, if not more, losers than winners. And the volatility will be extreme.
I would be very curious about an EV ETF’s performance.

 

[arcyallen]

You'll have to watch the holdings in the ETF you choose. I saw a graphic where Tesla makes up over 50% of the EV market, so depending on the weighting of the ETF you'll be basically buying Tesla similar to buying BRKB is buying an insurance company despite their other holdings.

I could do the math for how large AAPL was inside of BRK, but not the insurance business overall. Then I read this in a Morningstar report tonight:
"The insurance operations—Geico, Berkshire Hathaway Reinsurance Group, and Berkshire Hathaway Primary Group—remain important contributors to the overall business. Not only do they account for 20%-24% of Berkshire's pretax earnings (and 45% of our current valuation of the firm)..."

So I'd say you weren't far off when you said it was like buying an insurance company. There's still a lot more to the company, but insurance definitely does make up a large part of it.