5-Star ETFs Poised to Pop: Global X Lithium ETF

Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, the Global X Lithium ETF (NYSE: LIT  ) has earned a coveted five-star ranking.

With that in mind, let's take a closer look at Global X Lithium and see what CAPS investors are saying about the ETF right now.

Global X Lithium facts

Inception

July 2010

Total Assets

$104.3 million

Investment Approach

Seeks to provide investment results that correspond to the Solactive Global Lithium Index, which tracks companies active in the exploration and/or mining of lithium or the production of lithium batteries.

Expense Ratio

0.75%

Dividend Yield

1.8%

Year-to-Date / 1-Year Return

(33.4%) / (22.8%)

Top 10 Holdings With High CAPS Rating (4 or 5 stars) and Portfolio Weight

Sociedad Quimica y Minera (NYSE: SQM  ) (23%)

FMC (NYSE: FMC  ) (18.4%)

Rockwood Holdings (NYSE: ROC  ) (9.8%)

Sources: Morningstar and Motley Fool CAPS.

On CAPS, all of the 106 members who have rated Global X Lithium believe the ETF will outperform the S&P 500 going forward. These bulls include cablet and ILLUMI.

Less than a year ago, cablet succinctly summed up the bull case: "Lithium may possibly become the new oil for the 21st century as more devices (and soon autos) rely on longer lasting batteries. This ETF is a great way to get in now to Lithium while keeping lower risk than owning one or two of the underlying stocks."

Global X Lithium even sports an annual turnover ratio of just 6%. That's lower than other specialty commodity ETFs like Market Vectors Agribusiness (NYSE: MOO  ) (20%) and iShares S&P North American Natural Resources (NYSE: IGE  ) (11%).

CAPS member ILLUMI elaborates on the bull case:

Used for energy storage for smart grid (read: small-scale renewable/green energy), electric cars, phones/portable devices, medical, etc. Everything will be expected to last many hrs. without main power in the next few decades, and Li-Ion batteries are the way to store that energy, barring a major breakthrough in a different technology.

What do you think about Global X Lithium, or any other ETF for that matter? If you want to retire rich, you need to put together the best portfolio you can. Owning exceptional ETFs is a surefire way to secure your financial future, and on Motley Fool CAPS, thousands of investors are working every day to find them. CAPS is 100% free, so get started!

Interested in another easy way to track Global X Lithium? Add it to your watchlist.

Fool contributor Brian Pacampara owns no position in any of the companies mentioned. The Motley Fool owns shares of Rockwood. Motley Fool newsletter services have recommended buying shares of Chemical & Mining Co. of Chile. Try any of our Foolish newsletter services free for 30 days.

We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Fool's disclosure policy always gets a perfect score.


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Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On October 21, 2011, at 9:44 PM, newty74 wrote:

    Is lithium truly rare?I don't think it is.

    Also there are many forms of lithium not all are suitable for battery use.

    Also the automobile case isn't proven. Tesla motors et al are still sort in the trial phase. The technology isn't proven for wide spread adoption. The other issue is the infrastructure necessary to support these pure electric cars if mass adoption were to occur. Without infrastructure...adoption wouldn't happen and consumption won't spike.

    I hear a tesla roadster uses 7000 laptop capacity batteries to power it...if Mass adoption occurs lithium prices would definitely spike

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