BlackRock has launched an exchange-traded fund (ETF) that tracks companies involved in the production of electric cars. iShares Electric Vehicles and Driving Technology UCITS ETF (ECAR) will track Stoxx Global Electric Vehicles & Driving Technology index. This is composed of 96 companies that manufacture electric cars, batteries and car parts. The three largest components of this index are US-listed stocks Garmin (US:GRMN), Integrated Device Technology (US:IDTI) and Marvell Technology (US:MRVL). The ETF has an ongoing charge of 0.4 per cent.
Over three years to 26 February Stoxx Global Electric Vehicles & Driving Technology index has risen 36.2 per cent in US dollar terms, compared with 43.7 per cent for MSCI All Country World index. BlackRock said the ETF would help investors build portfolios in a more environmental, social and governance (ESG) conscious manner and give them exposure to the growing electric car market. BlackRock estimates that by 2040 around 60m electric cars will be sold a year, compared with around 1.1m a year at present.
But Peter Sleep, senior investment manager at Seven Investment Management, said: “Many of the [car part manufacturers] are available via developed-world equity ETFs, which [have charges as low as] 0.2 per cent, but this ETF costs 0.4 per cent. But the extra fee may be a small price to pay if iShares Electric Vehicles and Driving Technology UCITS ETF outperforms over the long term. However, the time it takes to get a new ETF to market can be quite long, and by the time a provider has noticed a new trend and got an ETF out, it [can be] too late to invest.”