10 Best Canadian Lithium ETFs 2022: Invest in Battery Power

The Electric Vehicle (EV) industry has become massive in recent years. Elon Musk’s Tesla has always led the charge, innovating the industry and making it more commonplace. Most traditional car manufacturers are now throwing everything they have to establish their dominance in the EV industry as well.

Morningstar analysts believe two out of three vehicles sold in 2030 will be EVs or hybrids. Lithium is the key ingredient for these battery-powered vehicles, and the metal is in high demand. Gaining exposure to lithium could set you up for significant long-term wealth growth.

My guide to the best Canadian lithium ETF can help you identify some of the top assets to consider for this purpose.

Best Canadian Lithium ETFs

What Are Lithium ETFs?

Exchange-Traded Funds (ETFs) are investment vehicles that offer you diversified exposure to a basket of securities through a single investment. Like individual stocks, you can buy and sell these ETFs throughout the day on a stock market.

However, there are crucial differences between investing in individual equity securities and ETFs.

When you buy an individual stock, you are investing your capital and staking it on the performance of a single company. When you purchase an ETF, you are investing your capital and staking it on the performance of a group of different companies tracking a specific index which, in this case, is related to lithium.

Allocating your capital to gain exposure to lithium could be an excellent move for you if you are bullish on the growing demand for the metal. The EV industry is expected to grow in the coming years.

Lithium is a key ingredient for the lithium-ion batteries used for EVs and various other battery-powered devices like your phone.

Investing in the best Canadian lithium ETF can help you diversify your capital across several companies with significant business activities related to lithium.

The growing demand for raw materials will directly impact the performance of these companies, but not all of them might do as well as others. An ETF offers safer exposure through diversification rather than investing in individual companies.

Is Lithium A Good Investment?

Lithium is undoubtedly a great investment due to the aggressively growing demand for raw materials and a supply that is struggling to keep up with the demand. It is possible that the surge in lithium production in recent years could see the supply outpacing the demand for the material in the next few years.

Another risk to allocating a significant chunk of your investment capital to lithium is the possibility of alternatives to lithium-ion batteries becoming more commonplace in the future.

For the time being, investing in lithium is undoubtedly one of the hottest trends for investors worldwide. I think that not investing in lithium would be a waste of a possibly wonderful investment opportunity.

Best Canadian Lithium ETFs

This section of my guide to the best Canadian lithium ETFs will cover the top options you can consider if you want to gain exposure to the raw material crucial for producing the batteries powering a greener future for the world.

Not many lithium-focused ETFs are available in Canada, or worldwide for that matter. There are a few funds that offer significant exposure to businesses with lithium-related activities, among others.

My guide also includes several high-quality lithium stocks that you could consider investing in if you want to create a self-directed portfolio of lithium-related businesses to gain more control over your exposure to different publicly-listed companies involved with the metal.

1. Global X Lithium & Battery Tech ETF (LIT)

Global X Lithium & Battery Tech ETF (LIT)

Some key facts about Global X Lithium & Battery Tech ETF (LIT):

  • Ticker: NYSE Arca:LIT
  • Inception Date: July 22, 2010
  • Assets Under Management: US$5.63 million (as of October 31, 2021)
  • Management Expense Ratio: 0.75%

Global X Lithium & Battery Tech ETF (LIT) is widely regarded as the world’s first lithium ETF. LIT ETF is a US-listed fund that seeks to provide you with investment results corresponding to the price and yield performance of the securities as held in the Solactive Global Lithium Index.

From mining and refining the metal to battery production, the fund focuses on investing in the complete lithium cycle.

LIT ETF provides you with exposure to a globally diversified basket of equity securities that have substantial lithium-related business operations. It allocates 45.4% of all its assets to publicly-listed companies in China, its second-largest asset allocation is in the US at 21.9%, and third-largest in South Korea at 10.9%.

2. First Trust NASDAQ Clean Edge Green Energy Index Fund ETF (QCLN)

First Trust NASDAQ Clean Edge Green Energy Index Fund ETF

Some key facts about First Trust NASDAQ Clean Edge Green Energy Index Fund ETF (QCLN):

  • Ticker: NASDAQ:QCLN
  • Inception Date: February 08, 2007
  • Assets Under Management: US$3.31 billion
  • Management Expense Ratio: 0.60%

First Trust NASDAQ Clean Edge Green Energy Index Fund ETF (QCLN) is another US-listed ETF. The fund seeks to provide you with investment returns based on the price and yield performance of the securities as held in the NASDAQ Clean Edge Green Energy Index before fees and expenses.

The underlying index is a modified market capitalization-weighted index designed to track the performance of clean energy publicly-listed companies in the US, with significant exposure to lithium.

This fund offers you diversification across several industries related to clean energy, but it is not a pureplay lithium ETF. It also focuses its entire asset allocation on US-listed companies, adding a slightly greater degree of capital risk.

3. Amplify Lithium & Battery Technology ETF (BATT)

Amplify logo

Some key facts about Amplify Lithium & Battery Technology ETF (BATT):

  • Ticker: NYSE Arca:BATT
  • Inception Date: June 06, 2018
  • Assets Under Management: US$210.60 million (as of November 30, 2021)
  • Management Expense Ratio: 0.71%

Amplify Lithium & Battery Technology ETF (BATT) is another US-listed fund that could offer you exposure to lithium.

BATT ETF seeks to provide you with investment returns based on the performance of companies that generate significant revenue from developing, producing, and using lithium battery technology, including battery storage solutions, battery metals and materials, and electric vehicles.

BATT ETF accomplishes its goal by tracking the performance of equity securities as they are held in the EQM Lithium & Battery Technology Index. BATT ETF officially became a passively managed fund in 2020 instead of an actively managed fund.

Its most significant asset allocation is in China at 29.46%, its second-largest asset allocation is towards US-based companies at 20.51%, and third-largest towards Australian companies at 12.10%.

4. Horizons Global Lithium Producers Index ETF (HLIT)

horizons logo

Some key facts about Horizons Global Lithium Producers Index ETF (HLIT):

  • Ticker: TSX:HLIT
  • Inception Date: June 22, 2021
  • Assets Under Management: $16.61 million
  • Management Fee: 0.45%

Horizons Global Lithium Producers Index ETF (HLIT) is the only Canada-listed fund that offers you exposure to lithium. HLIT ETF is the newest fund that started trading on the TSX in June 2021.

The fund seeks to provide you with investment returns by tracking the performance of the Solactive Global Lithium Producers Index before fees and expenses.

HLIT ETF also focuses on investing in the full lithium cycle as the underlying index consists of publicly-listed companies engaged in the mining and production of lithium, lithium compounds, and lithium-related components. The fund seeks to hedge the US dollar value of its portfolio to the Canadian dollar at all times.

Best Canadian Lithium Stocks

5. Orocobre Ltd. Stock (ORL)

Orocobre Stock

Some key facts about Orocobre stock as of November 30, 2021:

  • Ticker: TSX:ORL
  • Market Capitalization: AUD$6.41 billion

Orocobre Ltd. stock is an Australian company that is cross-listed on the TSX. The company is a reputable supplier of lithium with exposure to other minerals like boron. The company boasts three different divisions, two of them operating in Argentina and one based in Canada.

Advantage Lithium is its segment that focuses on Canadian lithium reserves but it also has operations to mine the metal in Argentina. The stock is trading for $8.98 at writing, and it is currently hovering near its all-time highs.

6. Lithium Americas Corp. Stock (LAC)

Orocobre Stock

Some key facts about Lithium America’s stock as of November 30, 2021:

  • Ticker: TSX:LAC
  • Market Capitalization: $6.06 billion

Lithium Americas Corp. stock is a Vancouver-based company that focuses on operations in Argentina and the US, two of the most lithium-rich nations worldwide.

The company boasts long-term upside potential through extensive mining operations. Its mining project in Argentina and the US boasts a life of 40 and 46 years respectively.

The company prides itself on the cost-efficient production methods that allow it to mine and refine the metal at an expense of around $4,000 per ton. With wide margins amid rising demand and relatively limited supplies, the company’s medium- and long-term prospects look bright.

7. Standard Lithium Ltd. Stock (SLI)

Standard Lithium Ltd. Stock

Some key facts about Standard Lithium stock as of November 30, 2021:

  • Ticker: TSXV:SLI
  • Market Capitalization: $1.95 billion

Standard Lithium is a Vancouver-based company that focuses its entire operations in the US. It has two operations in the US, one based in California and the other in Arkansas.

The company is a relatively smaller-sized business, but it boasts a competitive edge through its use of chrematistic Direct Lithium Extraction (DLE) technology that allows it to tap into the power of lithium-rich brine.

The company does not extract the lithium-rich brine itself for its California-based operations. Instead, Standard Lithium has contracts with two companies in the region that give it access to all the raw material it needs for its operations to produce battery-grade lithium.

8. Sigma Lithium Ltd. Stock (SGMA)

Sigma Lithium Stock

Some key facts about Sigma Lithium stock as of November 30, 2021:

  • Ticker: TSXV:SGMA
  • Market Capitalization: $1.00 billion

Sigma Lithium Ltd. stock is another Vancouver-based company that was only founded in 2011. Sigma Lithium has operations based in Brazil, and it owns the right to mine from the most significant hard rock lithium deposits in the region.

It is a low-cost lithium producer with a focus on decreasing its carbon emissions to meet its ESG goals.

The company plans to reach net-zero carbon emissions by 2023, making it an attractive option for many investors who are concerned about the environmental impact of the companies they are investing in to gain exposure to lithium.

The $1.06 billion market capitalization lithium producer might not be the largest or the oldest company, but it’s trading at all-time highs at writing amid the lithium demand surge.

9. Neo Lithium Corp. Stock (NLC)

Neo Lithium Stock

Some key facts about Neo Lithium stock as of November 30, 2021:

  • Ticker: TSXV:NLC
  • Market Capitalization: $905.30 million

Neo Lithium Corp. stock is a Toronto-based company that boasts a small market capitalization compared to other companies listed in this guide. However, Neo Lithium’s Argentina-based Tres Quebradas (3Q) project is widely regarded as one of the top lithium assets worldwide.

The reserves there boast some of the lowest levels of impurities, and its identified reserves are estimated to be 4 million metric tons.

Neo Lithium’s 3Q project is the third-highest grade lithium project worldwide, and it is currently underway to develop other lithium-related resources, including lithium-rich brine ponds. Founded only in 2016, it has become a successful company in a short time, and it is trading at all-time highs at writing on the TSX.

10. Millennial Lithium Corp. Stock (ML)

Millennial Lithium Stock

Some key facts about Millennial Lithium stock as of November 30, 2021:

  • Ticker: TSXV:ML
  • Market Capitalization: $447.50 million

Millennial Lithium Corp. stock is a West Vancouver-based company founded in 2005. It is another Canadian company with extensive lithium operations in Argentina, operating in the “Lithium Triangle” in the country, one of the most lithium-rich areas worldwide.

The company owns the rights to mine in approximately 20,000 hectares within the Lithium Triangle.

It currently has one project that will come online to begin producing lithium by 2023. Its other projects might take longer to materialize fully.

Millennial Lithium stock is a riskier investment to consider since it technically does not produce lithium yet, and investors are more inclined towards companies with active operations instead of prospects.

However, it could be a good long-term prospect to consider depending on any favorable changes in demand and supply for lithium in the coming years.

How To Buy The Best Canadian Lithium ETFs In Canada

You can purchase the best Canadian lithium ETFs in Canada through most Canadian brokerage platforms that offer stock and ETF trading. My top choices are Wealthsimple Trade and Questrade.

ImageProduct TitleFeaturesPrice
Editor's Choice
Wealthsimple Trade
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Questrade
Questrade
  • ETF buys have $0 trading fees
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To learn more, check out my full breakdown of the best trading platforms in Canada here.

Conclusion

Investing in the best Canadian lithium ETFs is an ideal way to gain exposure to the performance of the element that is the backbone of the EV industry for risk-averse investors.

You can invest in lithium stocks with significant business processes related to lithium if you can identify high-quality equity securities if you can stomach the greater risk for the possibility of higher returns.

With rising inflation rates increasing living costs, you might also want to consider using the situation to your advantage by gaining exposure to commodities-related baskets of securities. If you want to invest in commodities, check out my list of the best commodity ETFs in Canada to explore your options.

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Author Bio - Christopher Liew is a CFA Charterholder with 11 years of finance experience and the creator of Wealthawesome.com. Read about how he quit his 6-figure salary career to travel the world here.

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