Invesco has expanded its commodities ETF offerings with an actively managed fund designed to provide economic exposure to the commodities widely used in the production of electric vehicles.
The Invesco Electric Vehicle Metals Commodity Strategy No K-1 ETF (EVMT), which charges a 59 basis point expense ratio, is the first fund to offer access to upstream electric vehicle transition themes by offering exposure to commodities critical to producing electric vehicles, according to a statement from the firm.
This approach allows investors the ability to focus solely on industrial metals, rather than a midstream investment in companies that manufacture batteries and electric vehicles.
“EVMT will be the first commodities fund to offer exposure to an electric vehicle theme, as well as the only ETF that considers metals necessary for whole car production, rather than a focus on battery production,” Jason Bloom, head of fixed income and alternatives ETF strategy at Invesco, said in a statement. “By considering the whole car production through a commodities lens, the composition of EVMT focuses on the full opportunity, which affects the weightings of the included metals.”
EVMT will invest in derivatives and other financially linked instruments to gain exposure to metals critical to electric vehicle production. These metals currently include aluminum, cobalt, copper, iron ore, nickel, and zinc. The active structure of the ETF gives it the potential to expand both the number and type of metals included in the ETF as electric vehicle production and technology evolves, according to a statement from the firm.
The interest in electric vehicles continues to build in the U.S., bolstered by President Biden’s executive order which set a goal for electric vehicles to make up half the cars and trucks sold in the U.S. by 2030. Major automobile manufacturers — including Ford, GM, Volvo, and Honda — have also committed to electric vehicle transition by 2040. The acceleration of electric vehicle production and the materials needed to ramp up this technology will be critical factors in decarbonization and the push to increase renewable energy, according to a statement from the firm.
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