Taiwan's first autonomous electric vehicles ETF was listed successfully on July 1st. The Cathay Securities Investment Trust had launched the "Cathay Global Autonomous Electric Vehicles ETF", and it began to officially trade on the Taiwan Stock Exchange (TWSE). On its first day of being listed, both the ETF's price and volume rose to record high levels.
According to the "2021 Global Automotive Consumer Study” published by Deloitte Touche Tohmatsu Limited (DTTL) in 2020, by 2030, up to a third of the new cars sold globally will be pure electric vehicles.
In addition, the report mentioned that the “peak” sales period of the traditional internal combustion engines is officially over. For the next 10~20 years, auto makers of electric vehicles will give an all-out effort to compete for market shares.
The study also claims that the sales of global electric vehicles will rise against the market headwind in 2021. Despite the negative impact of the pandemic, the annual shipment of EVs is expected to rise to 2.5 million units this year. In 2030, EV shipments are expected to reach 31.1 million units.
The development of 5G technologies and their infrastructures are paving the way for and bridging future applications. As electric vehicles are gradually being commercialized, this will help to create business opportunities that are worth 100 trillion USD for the EV industry for up to 20 years.
Yung-Chuan Chang, the CEO of Cathay Securities Investment Trust, indicates that EVs are getting popular globally and the EV industry is continuously growing for the following two reasons: First, most countries are trying to reach their carbon neutrality goals, so their policies are beneficial to the EV industry. Second, the US, China, and Europe are competing for the leadership position in the EV market. Thus, there is expected to be a major revolution in the auto manufacturing industry.
As the Cathay Securities Investment Trust is optimistic about the development of EVs, it has cooperated with 2 major companies (ICE Data Indices, LLC and FactSet Research Systems) to create the ICE FactSet Global Autonomous and Electric Vehicles Index.
ICE has been providing reliable index services for more than 50 years, and FactSet is known for its powerful RBICS database, which has up to 1600 industry categories. Together, they can precisely pick blue-chip-stock companies whose revenues are from the autonomous and electric vehicles industry.
As commented by Chang, from early 2021 on, the market has been hit with risks and uncertainties like the looming inflation issues, the rapid increases in US Treasury yields, the FED's balance sheet reductions, and the worsening pandemic situation. As of now, these factors are still affecting the global financial market. Electric vehicle related indices are also likely to be affected, too.
The Cathay Global Autonomous Electric Vehicles ETF is able to put together 100% pure autonomous and electric vehicles concept stocks and become the one and only pure EV ETF globally.
As indicated by the ETF's fund manager Kai-Hui (Jessie) Yu, positive and negative news will both influence the market indices' direction. Fortunately, at the latest meeting of the federal public market committee (FOMC) in June, it has been decided that the interest rate corridor will remain unchanged, at 0~0.25%. In addition, many countries are carrying out vaccination-related campaigns and fiscal policies. Therefore, the outlook of the economy is likely to stay on track to recovery. These reasons above will indirectly boost related autonomous and electric vehicles indices and technology indices.
The ICE FactSet Global Autonomous and Electric Vehicles Index's rate of return has recently risen by 10.4%. This performance is higher than the NASDAQ 100 index's 6.5%