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Question on Lithium ETFs & TraCR’s

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    Question on Lithium ETFs & TraCR’s

    Hi James. Enjoying your newsletters, guiding me in the right direction and keeping me from straying too far. I am very, as a %, heavy lithium and rare earths from Sept/Oct last year and now these stocks are coming off over the next months and you may be looking to buy.  I know you are being nimble and jumping in and out with rotation for alpha but what is your view of just sitting in these stocks now looking for the longer term over the coming years with the EV thematic? (I understand this is not personal advice.) Came across TraCRs and was wondering if it’s fishy and like to hear you thoughts? Are they like ETFs for individual US stocks but with much higher fees? Cheers Jill

    Answer

    Hi Jill,

    I do like the lithium story longer-term but like all new industries there will be some big winners and losers hence if I was simply looking to “buy & hold” long-term I would more likely consider an ETF covering a basket of stocks such as the LIT US ETF – more information on that can be found on LIT’s company page on the Market Matters website here

    There is a lithium & battery technology ETF on the ASX called ACDC from EFT Securities, however it holds lithium stocks as well as companies involved in batteries.

    TraCR  is an acronym for “Transferable Custody Receipt’ which are available on the Chi-X exchange as opposed to the ASX. TraCR’s are simply an easy way to trade large overseas well known stocks which are settled in $A. Personally I have never used these instruments, my preference is to put the initial leg work in and go direct to the source but they are gaining traction and I definitely won’t say never. The costs as I see it are brokerage plus of course, these are traded via market makers so they apply a bid / ask spread and that’s how they get paid. I’m not sure on the custody side.

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    Global X Lithium & Battery ETF (LIT US) ETF
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