The Top 4 Nickel ETFs To Buy in 2022: Invest in EV Battery Metals
Electric cars are powered by big lithium-ion batteries, which require a lot of “green metals” like nickel, cobalt, and lithium. Elon Musk has even tweeted that nickel was the “biggest concern” when it came to battery metals. Learn which funds invest in nickel.
SustainFi Updated December 7th, 2021
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Why invest in nickel?
Decarbonization is driving a boom in green metals like nickel, a silvery-white metal used in everything from electric car batteries to stainless steel appliances. Nickel is stable at high temperatures, increasing the EV’s driving range. Batteries with high nickel content can store more power and will be critical for the development of longer-range EVs, like electric trucks.
Although today about 70% of nickel goes to make stainless steel and only 7-8% goes into batteries, demand from EV batteries will represent more of the global demand in the future. Elon Musk has tweeted that nickel was the “biggest concern” for scaling EV battery production.
Nickel’s price rally has been fueled by excitement about EVs. In 2021, prices surged from $16,500 a ton to $20,000 a ton. However, the nickel market is volatile. Prices skyrocketed in 2019 after an Indonesia imports ban but collapsed in early 2020. The surge in 2020-2021 is driven by the hype around EVs, but new nickel projects are coming in Indonesia, Canada, and the U.S. Some analysts are forecasting a nickel surplus in 2022.
What ETFs invest in nickel?
There are several funds that invest in nickel and nickel mining stocks:
- iPath Series B Bloomberg Nickel Subindex Total Return ETN (JJN)
- iShares MSCI Global Metals & Mining Producers ETF (PICK)
- VanEck Green Metals ETF (GMET)
- Amplify Lithium & Battery Technology ETF (BATT)
🔔 Looking for nickel mining stocks? Check out this list of ten nickel mining companies.
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The best nickel ETFs
|Fund / Ticker||Expense Ratio||Assets ($m)||2021 Performance||Holdings||Nickel producers (% of fund)|
|iPath Series B Bloomberg Nickel Subindex Total Return ETN (JJN)||0.45%||25||18%||1||100%|
|iShares MSCI Global Metals & Mining Producers ETF (PICK)||0.39%||1,020||14%||218||25%|
|VanEck Green Metals ETF (GMET)||0.59%||10||-||44||17%|
|Amplify Lithium & Battery Technology ETF (BATT)||0.59%||255||23%||86||14%|
iPath Series B Bloomberg Nickel Subindex Total Return ETN (JJN)
- Expense ratio: 0.45%
iPath Series B Bloomberg Nickel Subindex Total Return ETN (JJN) is an exchange-traded note that tracks one nickel futures contract at a time. Although this ETN only has $25 million in assets, it is the easiest direct way for U.S. investors to get exposure to volatile nickel prices. (Buying futures directly is more complicated.)
However, JJN is not an ETF but an ETN, which is a form of debt issued by a bank, in this case, Barclays. Unlike an ETF, which buys and holds the underlying securities, an ETN doesn’t own anything. The Note’s backer (in this case, Barclays) promises to pay the return of the underlying futures contract. Since the ETN does not hold securities, it can match the return of the contract perfectly, eliminating tracking error. However, the ETN carries the credit risk of the issuer, so if Barclays goes bankrupt (which seems unlikely), investors may not get their money back.
iShares MSCI Global Metals & Mining Producers ETF (PICK)
- Expense ratio: 0.39%
- Nickel stocks (% of assets): 25%
Launched in 2012, the iShares MSCI Global Metals & Mining Producers ETF (PICK) is a popular metals and mining ETF. It tracks an index of metal and mining companies, excluding gold and silver.
PICK is a diversified fund with about 220 holdings; the top three are BHP Group, Rio Tinto Plc, and Freeport-Mcmoran. Nickel-producing stocks include BHP, Vale, Glencore, Norilsk Nickel, IGO Ltd, Nickel Mines Ltd, and Jinchuan Group. All-in, nickel-related holdings are around 25% of the fund’s assets, which is a lot, though diversified mining companies like Glencore and BHP mine metals besides nickel.
The fund manager doesn’t specify how much of the fund is invested in nickel, but it should be part of the diversified metals bucket, which is nearly 50% of the ETF. Other metals PICK invests in include steel (34%), copper (10%), aluminum (5%), and precious metals (3.5%).
VanEck Green Metals ETF (GMET)
- Expense ratio: 0.59%
- Nickel stocks (% of assets): 17%
Launched in November 2021, the VanEck Green Metals ETF tracks the MVIS Global CleanTech Metals Index, which invests in companies that produce, refine, process and recycle green metals. Green metals are metals that enable the transition from fossil fuels to clean energy. They include nickel, cobalt, copper, and lithium.
GMET has just launched and has about $10 million in assets. The fund’s 44 holdings include the world’s top nickel producers like Glencore, Norilsk Nickel, and Jinchuan Group. (However, mining giants like Glencore sell other metals, so nickel is only about 5% of Glencore’s earnings.) All in, we found that major nickel producers represented nearly 17% of this ETF’s assets.
GMET is a global ETF investing in China, Australia, and the U.S. It costs 0.59%.
Amplify Advanced Battery Metals & Materials ETF (BATT)
- Expense ratio: 0.59%
- Nickel stocks (% of assets): 14%
Launched in 2018, BATT invests in companies that make money from lithium battery technologies, including battery storage, battery metals, and electric vehicles. This is a thematic battery ETF, not a metals and mining ETF. Around one-third of the fund is invested in metals and mining; the rest is in electric cars and components, electric equipment, chemicals, semiconductors, and other stocks. BATT has a reasonable 0.59% expense ratio.
The ETF has around 90 holdings, and each investment is capped at 7%. The top three stocks are EV battery manufacturer CATL, Tesla, and the mining giant BHP Group. Nickel miners include BHP (in the top three), Glencore, Norilsk Nickel, IGO Ltd, Vale Indonesia, and Jinchuan Group. Added together, nickel stocks are about 14% of the ETF’s assets.
BATT is a thematic way of investing in lithium-ion batteries, though not directly in nickel.
💰 Which nickel ETF is best?
- PICK is a traditional metals and mining ETF, which has around a quarter of its assets invested in large nickel producers.
- However, if you want to specifically bet on EV batteries or green metals, GMET or BATT may be better options, even though they own fewer nickel producers.
- If you just want exposure to the price of nickel futures, JJN is the best bet.
NOT INVESTMENT ADVICE. The content is for informational purposes only; you should not construe any such information as investment advice.
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Frequently Asked Questions
How can I invest in nickel?
You can buy nickel mining stocks, ETFs like PICK (though there is no ETF 100% dedicated to nickel), or invest in nickel futures directly or through an ETN, the iPath Series B Bloomberg Nickel Subindex Total Return ETN (JJN).