Initiatives for Innovation in the Automotive Industry Will Fuel “DRIV” ETF
This article was originally published on ETFTrends.com.
The automotive industry is constantly innovating whether it’s the rise of electric vehicles, autonomous self-driving transportation and organizational initiatives to drive more innovation in the sector. For example, according to a recent press release, Karma—the Southern California-based high-tech mobility incubator and creator of luxury electric vehicles, and the Alliance for Automotive Innovation, announced that the company has joined the organization as its newest member.
“Being part of the Alliance for Automotive Innovation significantly amplifies Karma’s voice supporting policies that encourage the technical excellence needed to build future personal transportation solutions,” said Karma CEO Dr. Lance Zhou. “Karma is a high-tech incubator; an open platform, a test bed for emerging innovation, and a supplier to others who need our engineering, design, customization and manufacturing resources to speed their product development or access to technology.”
All the innovation in the sector bodes well for the Global X Autonomous & Electric Vehicles ETF (DRIV) . DRIV seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of the Solactive Autonomous & Electric Vehicles Index.
DRIV provides:
High Growth Potential: DRIV enables investors to access high growth potential through companies critical to the development of autonomous and electric vehicles – a potentially transformative economic innovation.
Unconstrained Approach: DRIV’s composition transcends classic sector, industry, and geographic classifications by tracking an emerging technological theme.
ETF Efficiency: In a single trade, DRIV delivers access to dozens of companies with high exposure to the autonomous and electric vehicles theme.
Broad Disruptive Play
Disruption will eventually permeate all sectors in addition to the automotive industry. For a broad market play on disruption, investors can look at the ARK Autonomous Technology & Robotics ETF (ARKQ) . ARKQ seeks to provide investors with:
Exposure to Innovation: Aims for thematic multi-cap exposure to innovation across sectors. ARK believes the securities held in ARKK present the best risk-reward opportunities from ARK’s innovation-based themes.
Growth Potential: Aims to capture long-term alpha+ with low correlation of relative returns to traditional growth strategies and negative correlation to value strategies.
Diversification: Offers a tool for diversification due to little overlap with traditional indices. It can be a complement to traditional value/growth strategies.
Research: Combines top-down and bottom-up research in its portfolio management to identify innovative companies and convergence across markets.
Cost Effectiveness: Provides a lower cost alternative to mutual funds with true active management in an Exchange Traded Fund (ETF) that invests in rapidly moving themes.
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