Invesco is launching an ETF tied to metals used in electric vehicles as prices for key materials soars

• Invesco said Wednesday it launched an ETF focused on metals key to the production of electric vehicles.
• The Invesco Electric Vehicle Metals Commodity Strategy will provide exposure to aluminum, cobalt, copper, iron ore, nickel, and zinc.

Money manager Invesco on Wednesday launched an exchange-traded fund aimed at providing exposure to industrial metals needed to make electric vehicles, as commodity prices have surged and the market for EVs continues to expand.

The Invesco Electric Vehicle Metals Commodity Strategy No K-1 ETF began trading Wednesday under the EVMT ticker and is the first of its kind, with the non-equity fund offering investors access to key metals needed by all EV manufacturers, the company said in a press statement.

EVMT will invest in derivatives and other instruments financially linked to exposure to aluminum, cobalt, copper, iron ore, nickel, and zinc. EVMT is the "only ETF that considers metals necessary for whole car production, rather than a focus on battery production," said Jason Bloom, head of fixed income and alternatives ETF strategy at Invesco, in the statement.

"By considering the whole car production through a commodities lens, the composition of EVMT focuses on the full opportunity, which affects the weightings of the included metals," he added.

The fund will be actively managed and holds the potential to expand both the number and type of metals as EV production and technology evolve, Invesco said.

The ETF's introduction arrives as a range of commodity prices has scaled higher in the wake of the war against Ukraine by Russia, an exporter of metals like aluminum, copper, and nickel as well as other natural resources. Nickel prices nearly doubled last month before paring gains, as escalating concerns about production disruptions in Russia triggered a short squeeze.

Prices for industrial metals have also benefitted from quickening growth in the EV market. In the US, the share of zero-emission vehicles is on track for a new high of 5% in 2022, according to an IHS Markit estimate last year. That would mark an increase from 3% in 2021, which was another notable period for market expansion as consumers bought vehicles from Tesla, Ford and other vehicle manufacturers.

EV market share is on pace to reach roughly 31% by 2030, said IHS Markit.