Market Overview

An Active Approach To Autonomous Vehicle Investing

An Active Approach To Autonomous Vehicle Investing

There are several exchange traded funds focusing on futuristic approaches to transportation, such as electric and autonomous vehicles. Most of these funds are passive index-based products, but a new active idea is here.

The Smart ETFs Smart Transportation & Technology ETF (NYSE: MOTO) debuted Monday courtesy of California-based Guinness Atkinson Asset Management.

“The actively managed ETF will hold 35 equity positions of approximately equal weight, a signature investment approach of Guinness Atkinson’s fund strategies, and will have a global mandate,” according to a statement from the fund.

Why It's Important

MOTO aims to tap into some of the seismic shifts at play in the transportation industry today, be it the electric vehicle boom led by the likes of Tesla Inc (NASDAQ: TSLA), autonomous vehicles, ride-hailing via companies like Lyft (NASDAQ: LYFT) and Uber Technologies (NYSE: UBER), self-flying taxis and more.

Those are elements in what Guinness Atkinson calls “smart transportation.”

“Smart transportation is autonomous vehicles,” the fund issuer said. “It is electric vehicles. It is vehicles seeing and communicating with each other. It is ride sharing and transportation as a service which will result in considerable savings for consumers. It is the efficient use of vehicles rather than having them be parked 95% of the time.”

The new new MOTO holds 35 stocks on equal-weight basis. Holdings include Tesla, Alphabet Inc. (NASDAQ: GOOG), Taiwan Semiconductor (NYSE: TSM) and Intel (NASDAQ: INTC).

MOTO may be a thematic ETF, but its approach is broad, touching various corners of the new transportation ecosystem, such as “vehicle technologies, battery or fuel production and storage, charging, smart grids, networks, efficiency technologies and other activities, services and products that enable or enhance autonomous or electric vehicles (both ground-based and airborne),” according to the issuer.

What's Next

It's hard to argue with the investment thesis behind MOTO. Electric vehicle costs are declining and are expected reach parity with internal combustion engines over the next several years.

Additionally, self-driving technology is progressing while the notion of transportation as a service is gaining traction, indicating that MOTO could be a well-timed addition to the thematic ETF landscape.

The new ETF charges 0.68% per year, or $68 on a $10,000 investment.

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