Secondary Battery ETF Returns Shine Bright

[Asia Economy Reporter Junho Hwang] The returns on secondary battery exchange-traded funds (ETFs) are rising again.

According to the Korea Exchange on the 22nd, Mirae Asset Global Investments' ‘TIGER China Electric Vehicle SOLACTIVE’ rose 20.84% over the past month. It recorded the highest return among ETFs listed domestically. Other notable performers include TIGER Secondary Battery Theme (10.05%) and Samsung Asset Management's Secondary Battery Industry (9.66%).

The renewed optimism for secondary battery stocks is due to global automakers announcing plans to expand electric vehicle production and improvements in market conditions such as interest rates. In particular, foreign capital inflows into secondary battery stocks stand out. SK IE Technology rose 36.71% amid this atmosphere. Iljin Materials (17.56%), F&F (18.45%), Samsung SDI (8.75%), and POSCO Chemical (3.34%) also increased. Although EcoPro BM and L&F conducted paid-in capital increases worth approximately 400 billion and 500 billion KRW respectively, their stock prices are hitting new highs.

Initially, secondary battery stocks were a theme that gained momentum last year due to the rise in Tesla's stock price, a U.S. electric vehicle manufacturer. However, earlier this year, as COVID-19 vaccines were distributed and market interest rates rose amid economic recovery, enthusiasm for growth stocks including secondary batteries cooled down.

Despite the significant rise in the past month, expectations remain high due to favorable industry conditions. According to the International Energy Agency (IEA), global electric vehicle sales are expected to reach approximately 11.5 to 18 million units by 2025. The share of electric vehicles in total sales is projected to be around 10 to 19%. Last year, the global market share of electric vehicles was recorded at 4.6%.

Researcher Songcheol Kang of Eugene Investment & Securities said, "ETFs investing in lithium or secondary batteries overseas have risen 25% over the past three months, which is the largest increase among major ETFs except for natural gas products," adding, "As lithium shortages are expected due to the expansion of electric vehicle adoption, if volatility increases in the short term, it could be a buying opportunity."

This content was produced with the assistance of AI translation services.