Battery Materials ETF Launches

June 06, 2018

Amplify Investments, the firm founded by ETF industry stalwart Christian Magoon, today has rolled out an ETF focused on the components that go into the production of batteries. The Amplify Advanced Battery Metals and Materials ETF (BATT) is actively managed and looks at companies that engage in the extraction, production and recycling of materials for advanced battery technologies.

The fund comes with an expense ratio of 0.72% and lists on the NYSE Arca.

Methodology

The battery-related materials the fund focuses on include lithium, cobalt, nickel, manganese and graphite. To be considered for inclusion, companies must have at least $75 million in assets under management and meet liquidity requirements, as well as be listed on a major exchange with few restrictions on foreign investors.

More importantly, they must generate at least half their revenue from operations around the production and recycling of the identified advanced battery materials, or they must be in the top five of such companies with at least 10% of global market share with regard to any of the five identified materials, the prospectus says.

According to the document, companies are equal-weighted to start within their primary buckets, which are basically whatever metal or activity they are primarily engaged in. There is a bucket for each of the following metals: lithium, cobalt and nickel. Meanwhile, graphite, manganese and recycling are all grouped into another bucket.

The equal weightings can be adjusted by the fund’s managers as needed based on developments around the stock in question or the industry in which it operates. Such changes can be made based on almost any criteria, including company fundamentals, reserves and inventory, and a firm’s environmental, social and governance score. 

Companies can be selected from across the small-, mid- and large-cap size segments, with the portfolio generally holding 35-55 securities, the prospectus says.

Contact Heather Bell at [email protected]

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