Cobalt has a variety of applications and is poised to be used much more in the coming years. Here we'll check out the 3 best cobalt ETFs for 2023.
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Introduction – Why Cobalt ETFs?
Cobalt is used in a wide range of industrial, technological, and medical applications. Examples include jet engines, magnets, and rechargeable batteries.
Cobalt is typically combined with other metals to make alloys. Cobalt alloys can withstand extreme temperatures, which is why they're used heavily in the production of jet engine parts like turbine blades.
Other uses include MRI machines, generators, artificial joints, ceramics, cutting tools, electronic devices, and arguably most notably, rechargeable batteries. That last one is particularly significant with the soaring interest in electric vehicles.
Cobalt is also used for wind turbines and solar panels. So more generally, with the push for sustainable energy, cobalt mining and utilization are set to grow rapidly in the coming years as a result.
Below we'll check out a few of the best cobalt ETFs.
The 3 Best Cobalt ETFs
The 3 cobalt ETFs below differ somewhat in scope, cost, popularity, and selection.
EVMT – Invesco Electric Vehicle Metals Commodity Strategy No K-1 ETF
EVMT from Invesco launched in early 2022 and has roughly $23 million in assets.
EVMT actively trades commodity futures and other financial instruments that provide exposure to the various metals used in the production of electric vehicles, including cobalt, nickel, iron ore, aluminum, copper, zinc, and silver.
EVMT has an expense ratio of 0.59% and conveniently does not generate a K-1 at tax time.
KMET – KraneShares Electrification Metals Strategy ETF
KMET from KraneShares is similar to EVMT above but launched later in 2022 and has about the same amount of assets.
KMET passively focuses on futures contracts for metals involved in clean energy. The underlying Bloomberg Electrification Metals Index invests in aluminum, copper, nickel, zinc, cobalt, and lithium. These metals are all core components for batteries, electric vehicles, and the renewable energy infrastructure.
KMET also avoids a K-1 and has a fee of 0.79%.
BATT – Amplify Lithium & Battery Technology ETF
BATT from Amplify launched in 2018 and is more popular than the other two funds at about $160 million in assets. It also differs greatly in how it gets its exposure to metals.
BATT seeks to track the EQM Lithium & Battery Technology Index, which holds a cap weighted basket of battery materials companies that mine or produce lithium, cobalt, nickel, manganese, and graphite. To qualify for inclusion, companies must generate at least half of their revenue from the mining, exploration, production, development, processing, or recycling of these metals.
BATT has 89 holdings and an expense ratio of 0.59%.
Where To Buy These Cobalt ETFs
All these cobalt ETFs should be available at any major broker. My choice is M1 Finance. The broker has zero trade commissions and zero account fees, and offers fractional shares, dynamic rebalancing, and a modern, user-friendly interface and mobile app. I wrote a comprehensive review of M1 Finance here.
Disclaimer: While I love diving into investing-related data and playing around with backtests, this is not financial advice, investing advice, or tax advice. The information on this website is for informational, educational, and entertainment purposes only. Investment products discussed (ETFs, mutual funds, etc.) are for illustrative purposes only. It is not a recommendation to buy, sell, or otherwise transact in any of the products mentioned. I always attempt to ensure the accuracy of information presented but that accuracy cannot be guaranteed. Do your own due diligence. I mention M1 Finance a lot around here. M1 does not provide investment advice, and this is not an offer or solicitation of an offer, or advice to buy or sell any security, and you are encouraged to consult your personal investment, legal, and tax advisors. All examples above are hypothetical, do not reflect any specific investments, are for informational purposes only, and should not be considered an offer to buy or sell any products. All investing involves risk, including the risk of losing the money you invest. Past performance does not guarantee future results. Opinions are my own and do not represent those of other parties mentioned. Read my lengthier disclaimer here.
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