An ETF To Buy For The Autonomous Vehicle Revolution

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A Biden administration should bolster the ongoing EV and autonomous vehicle trend through substantial capital inflows and tax subsidies. And, with this, as EV giants and start-ups outperform the broader market, the Global X Autonomous & Electric Vehicles ETF (DRIV) should, we think, provide optimal risk-return exposure.

This year is poised to be a big one for the technology-dependent electric vehicle (EV) market. As the clean energy drive is expected to commence in earnest with Joe Biden’s inauguration as U.S. president, the electric vehicle segment should witness significant momentum. In fact, many states, such as California, have already announced a ban on the sale of new internal combustion vehicles by 2035, supporting the growth of the EV industry. This comes in after nine countries, including the U.K. have announced similar bans.

The investment objective of the Global X Electric Vehicles & Autonomous Vehicles ETF seeks to use algorithms to pick companies that “are involved in the development of electric vehicles and/or autonomous vehicles, including those that make components for those cars and those that provide services for them.

Global X Autonomous & Electric Vehicles ETF (DRIV - Get Rating) has been surging, as evident from its 76% gains over the past year. Since its inception in April 2018, the ETF has closely tracked the benchmark Solactive Autonomous & Electric Vehicles Index. This, coupled with several other factors, has helped DRIV earn a “Strong Buy” rating in our proprietary rating system.

Here is how our proprietary POWR Ratings evaluates DRIV:

Trade Grade: A

DRIV is currently trading above its 50-day and 200-day moving averages of $22.62 and $17.04, respectively, indicating a golden cross uptrend. The ETF has gained 48.9% over the past three months, reflecting  solid short-term bullishness.

DRIV has an expense ratio of 0.68%, which is 80 basis points lower than the category average of 0.76%. The ETF’s net fund inflows as of January 12 was $45.85 million, up 673.2% year-to-date. DRIV pays $0.07 as dividends on a semi-annual basis, yielding 0.26% at its current share price.

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