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Lithium ETF Gets a Lift

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"Global X Lithium ETF rises after Morgan Stanley upgrade."

ETF Trends, Tom Lydon

An exchange traded fund that invests in companies that are active in the exploration and mining of lithium and battery producers (Global X Lithium ETF) rose on Monday following an upgrade at Morgan Stanley.

"Demand for lithium has increased dramatically in recent times, and investment here will require a strong positive thesis for sustained demand increase going forward," Morningstar says in a profile of the fund. "Lithium is a commodity, a rare earth metal, but investors should understand the mechanics of this fund before attempting to use [the ETF] as a proxy for spot lithium."

Unlike some other commodity ETFs, the lithium fund invests in stocks rather than physical lithium or futures contracts.

"Lithium is used almost exclusively for industrial purposes, and its price will, thus, fluctuate with industrial activity," according to the profile.

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