BlackRock launches thematic ETF tracking self-driving and electric vehicle innovation

Apr 18th, 2019 | By | Category: Equities

BlackRock has launched a new thematic investing ETF that provides exposure to global stocks along the full value chain of self-driving and electric vehicle industries.

BlackRock self-driving electric vehicle thematic ETF

The fund is designed to provide exposure to firms along the full value chain of self-driving and electric vehicle industries.

The iShares Self-Driving EV and Tech ETF (IDRV US) has listed on NYSE Arca and comes with an expense ratio of 0.47%, cheaper than all rival ETFs in this space.

The fund is linked to the NYSE FactSet Global Autonomous Driving and Electric Vehicle Index which covers relevant firms listed globally on stock exchanges that are accessible to foreign investors.

Stocks must have a minimum market capitalization of $300 million and a three-month average daily traded value of at least $2m to be eligible for inclusion.

The index uses the Revere Business Industry Classification System (RBICS) developed by FactSet to identify companies linked to the self-driving and electric vehicle theme. It does this by examining the proportion of revenue derived from key industries as well as the nature of the business relationship (whether supplier or customer) between potential constituents in key industries.

The methodology aims to include all firms classified as electric vehicle manufacturers, autonomous driving vehicle manufacturers, electric vehicle battery producers, electric vehicle battery material suppliers, and autonomous driving and electric vehicle technologies enablers.

Constituents are weighted by market capitalization, subject to a 4% cap per stock. The index is reconstituted annually in December and rebalanced semi-annually.

Half the index’s weight (51.0%) is currently allocated to stocks in the US, with the next largest country exposures being Germany (14.7%), Japan (13.0%) and South Korea (8.2%). The vast majority of the total exposure is dedicated to three sectors: consumer discretionary (42.2%), information technology (34.2%) and industrials (15.5%).

There is a growing number of ETFs in the US targeting the self-driving and electric vehicle theme. These include the Global X Autonomous & Electric Vehicles ETF (DRIV US), the KraneShares’ Electric Vehicles and Future Mobility ETF (KARS US), and the Innovation Shares NextGen Vehicles & Technology ETF (EKAR US) with expense ratios ranging between 0.65% and 0.70%. The KraneShares fund is the largest at around $40m AUM.

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