The electric vehicle industry is an industry ripe for innovation and competition for a variety of different reasons. After all, the industry has experienced significant growth over the past five years, increasing almost 10-fold from 2017 to 2022.
Multiple mutual funds – also known as exchange-traded funds (or ETFs) – exist to fund efforts to develop, produce, and use lithium battery tech, including electric vehicles.
But what electric vehicle mutual fund is the best? I’ll be going through six electric vehicle mutual funds to help figure that out.
Before you read on, it’s always important to remember that, just because something is good to invest in today, it does not mean that it will necessarily be good tomorrow.
Especially in an economy that is somewhat shaky, you should always be diligent about following these electric car mutual funds to see whether they are still a worthwhile consideration.
Methodology
Just to make it clear, I’ll go through the standards I used when determining my assessment of these mutual funds. Risk is, of course, always a valuable consideration.
An investment that is high-risk can produce good returns if it pays off, but you will definitely find enough situations where a high-risk investment ends up with low returns.
The same can be said for low-risk investments, which could wind up blowing beyond expectations, giving you more return than you expected.
These mutual funds are not ranked, but instead ordered alphabetically. I tried to gather a diverse list of examples, such that you have the chance to see a variety of options at your disposal.
Best Electric Vehicle Mutual Funds
1. Axis Value Fund
Originally launched in September 2021, Axis Value Fund invests primarily in equity and equity-related securities using a value-investing strategy. This involves pursuing EV (electric vehicle) stocks they believe are being undervalued.
For investors’ convenience, Axis Value Fund has an Axis Mutual Fund app that makes it easier to invest wherever they may be.
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Axis Value Fund’s Portfolio
Seven of its 32 stocks are related to electric vehicles. This accounts for 19.5 percent of its total assets. In total, it allocates approximately 64 percent for large-caps, 20 percent for mid-caps, and finally, 9 percent for small-caps.
Axis Value Fund’s EV portfolio constitutes a number of electric vehicle stock holdings. One of their holdings is Tata Motors Ltd, an Indian automobile manufacturing company that controls a sizable percentage of the consumer vehicle market.
In addition, Axis Value Fund has stakes in other automobile manufacturing businesses, such as Suprajit Engineering Ltd. and Mahindra & Mahindra Ltd.
Axis Value Fund also has a stake in an aluminum manufacturing company called Hindalco Industries Ltd. and has a stake in Tata Power Company Ltd; the largest integrated power company in India.
Axis Value Fund aims to have multiple types of electric vehicle companies involved with their business. Not only do they have stocks in auto OEM companies, but they also work with auto ancillaries, EV commodity stocks, and charging infrastructure stocks. This has aided it well in diversifying its EV stocks.
Axis Value Fund Pros
- Avoids value traps – stocks that are not as valuable as it seemed
- Good track record
- A lot of potential if you’re willing to stick it out
- Has an app that improves accessibility
Axis Value Fund Cons
- Its non-traditional design creates difficulties for people trying to figure out how funds may perform in certain cycles
- Objective may carry potential risks
Is Axis Value Fund a good mutual fund?
There is a lot of potential behind the Axis Value Fund, but I think it’s important to exercise caution and watch to see the direction it goes. Its non-traditional nature makes it a little more difficult to tell the way the wind is going to blow, so to speak. Its investment objective also has trouble as far as risk goes.
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2. HDFC Large & Midcap Fundbn
HDFC Large & Midcap Fund was launched comparatively early, originally launching in February 1994. It was originally launched as the HDFC Growth Opportunities Fund.
HDFC Large & Midcap Fund aims to prioritize large-cap and mid-cap companies. Additionally, it holds in high importance having a decently diversified portfolio of EV stocks.
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HDFC Large & Midcap Fund’s Portfolio
HDFC Large & Midcap Fund’s portfolio consists of a whopping 131 stocks, 17 of which are related to electric vehicles. These electric vehicle companies comprise approximately 19.4 percent of the company’s portfolio.
HDFC holds multiple notable stocks, including automobile manufacturer Tata Motors, the jack-of-all-trades Reliance Industries, battery tech company (among other things) Bharat Electronics, and more.
HDFC Large & Midcap Fund includes auto OEMs, among other types of EV stock holdings. For example, HDFC Large & Midcap Fund deals with chemical companies such as Tata Chemicals Ltd.
HDFC Large & Midcap Fund Pros
- Has a decent mixture of risk/return
HDFC Large & Midcap Fund Cons
- Customer service leaves something to be desired
- Website design and functionality have had issues
- Multiple reports of issues with this fund have been reported by several of those who have invested
Is HDFC Large & Midcap Fund a good mutual fund?
I honestly have a lot of trouble recommending this one. While it is no slouch when it comes to notability as a mutual fund, it has not been the best experience for me. I’ve also seen reports from others that the mutual fund has had serious issues.
Because of this, you should be careful to read reviews and look into it yourself so you can get the best idea possible of whether it is the right mutual fund for you.
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3. L&T Large & Midcap Fund
The L&T Large & Midcap Fund was launched back in May 2006, though it was originally known as the L&T India Special Situations Fund at the time.
It changed from L&T India Special Situations Fund to L&T Large & Midcap Fund after a change of the Securities and Exchange Board of India (SEBI)’s changes.
L&T Large & Midcap Fund’s Portfolio
L&T Larde & Midcap Fund’s goal is to focus on a diversified portfolio in order to help create long-term growth. The company has a total of 56 stocks in its portfolio, of which 10 of those are electric vehicle companies.
This comprises a total of about 21.9 percent of their portfolio. L&T Large & Midcap Fund held allocations of 54 percent to large-caps, 36 to mid-caps, and 8 percent to small-caps.
Their EV stocks include multiple holdings, including the conglomerate Reliance Industries, the energy company Tata Power Company, and forging company Sona BLW Precision Forgings.
Its diversified portfolio comprises a number of areas of the electric vehicle industry, including auto OEM, ancillaries, chemicals, and charging infrastructure.
L&T Large & Midcap Fund Pros
- Investors who stick it out have a lot to gain
- Consistently outperforms its own benchmarks
L&T Large & Midcap Fund Cons
- Despite potential future gains, there are also short-term risks associated
- You’ll have to stick it out if you want to get something good out of it
Is L&T Large & Midcap Fund a good mutual fund?
Ultimately, I think it comes down to what you hope to get out of a mutual fund investment. If you want to get quick results, then this is not likely to be the best pick. However, if you are willing to be patient, there are a lot of benefits to investing in this.
It may be a good investment to make if you have money to spare, though if you want to be more cautious or desire short-term results, you should probably find something else to invest in.
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4. Quantum Long-Term Equity Value Fund
Quantum Long Term Equity Value Fund was launched months earlier than L&T Large & Midcap Fund, back in March 2006.
Quantum Long Term Equity Value Fund invests in companies that have the potential to benefit from future advancements expected to occur as it relates to the Indian economy’s growth and development.
And if you ask me, electric vehicles are definitely up there in terms of markets with a lot of potential for growth, both in and out of the Indian market.
Another important aspect of Quantum Long Term Equity Value Fund is that it aims to provide equity exposure to investors in need of help. Specifically, investors who have the potential to achieve long-term capital appreciation are a specific interest for this fund.
Another goal of the fund is to make the fund an appealing option for potential investors who are looking for a mutual fund that they can attach to for an extended period of time.
Investing in equity tends to carry a fair bit of risk, but at the same time, it also has the potential to produce high rewards.
Quantum Long-Term Equity Value Fund’s Portfolio
Quantum Long Term Equity Value’s portfolio consists of a total of 29 stocks. Of these stocks, seven of them are EV stocks, which comprise a total of 20.2 percent of the portfolio.
Quantum Long Term Value Fund aims to ensure that it invests in multiple potential avenues in the electric vehicles market. For example, while a fair few of their investments are auto OEMs, including Bajaj Auto, Mahindra & Mahindra, Eicher Motors, and Hero MotorCorp, there are also charging infrastructure providers as part of their stability, such as NTPC.
The company has an equity allocation of approximately 80 percent in large caps, as well as 20 percent in mid-caps. A portion was in both cash and cash equivalents.
Quantum Long-Term Equity Value Fund Pros
- Can be a safer investment than other similar options
- Comparatively decent chance to get money back on your investment
Quantum Long-Term Equity Value Fund Cons
- The comparatively safe investment means that the returns are not going to be as great
Is Quantum Long Term Equity Value Fund a good mutual fund?
If you are interested in investing in a mutual fund but don’t want to take on a high-risk investment, this might be a more ideal direction to take. Yet, this means you won’t get as much back for it.
Of course, just because this is a relatively low-risk investment, does not mean that it is without risk. Take it from me – I have had more than my fair share of investment failures, even some that seemed like sure things. It did show positive year-to-date results, however.
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5. Templeton India Value Fund
Templeton India Value Fund was originally launched in September 2003, when it was originally known as Templeton India Growth Fund. It was later changed following changes made by SEBI.
Templeton India Value Fund invests in companies that have been undervalued that have great potential to generate capital appreciation over a long period of time.
Templeton India Value Fund’s Portfolio
This company invests in 34 stocks according to its portfolio. Of these stocks, about eight stocks are EV stocks, which comprise 20.5 percent of its EV portfolio.
It has multiple holdings, including automobile manufacturers like Bajaj Auto and Tata Motors, as well as electronics manufacturers like Bharat Electronics.
Templeton India Value Fund has a number of investment types, including auto OEMs, charging infrastructure providers, an electronic products manufacturer, and an EV battery maker. This helps make it much more diverse, as the mutual fund has its fingers in a lot of proverbial pies.
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Templeton India Value Fund Pros
- You can generally rely on getting returns back
- The more risk is taken, the better your return
Templeton India Value Fund Cons
- Investors may have to take on certain risks if they want their investment to pay off
Is Templeton India Value Fund a good mutual fund?
This is not going to be a good choice for a newbie, but if you’re willing to take the risk, there are a lot of rewards to be had. There is risk associated with any investment, but if you want to get the big payouts, you either have to get lucky or take big risks. For people invested, this fund has demonstrated decent year-to-date results of 15.46 percent.
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FAQs
Are mutual funds worth it?
It’s one thing to talk about what the best mutual fund for electric vehicles is, it’s a whole other thing to talk about the value of mutual funds. Thus, it begs the question: is it worth getting into electric vehicle mutual funds at the moment?
While things may change, it does appear that mutual fund schemes across the board – electric vehicles or otherwise – are on the downswing.
Because of a steep correction in US markets, a large number of mutual fund schemes in global markets are experiencing sharp losses. This has caused some investors to have cold feet about investing in mutual funds.
It’s hard to say how the market will go in the future. It could experience further disruptions, or it could bounce back. Just remember: when dealing with anything to do with the stock market, you need to make sure that you play it smart.
Are mutual funds different from electric vehicle ETFs?
When looking up mutual funds, you may have noticed something called an ‘ETF’, which stands for exchange-traded fund. It has some similarities to a mutual fund, such as its tracking of bond indexes (among others), but they are distinguished from one another due to the fact that it can be traded on a listed exchange.
Is an EV ETF a better option than an EV mutual fund?
If I had to pick one or the other, I would have some difficulties choosing. Whether you go with mutual funds in the EV market or you go with electric vehicle ETFs. Ultimately, the ideal avenue to take here would be based on what you consider to be important to you.
The actual structure of electric vehicle ETFs do not have much of an impact on either future, present, or past performance. Instead, what matters is the holdings before anything else. Thus, you need to decide whether being able to trade EV ETFs throughout the day, as opposed to only being purchasable at the end of the day, is an important factor for you.
There are a number of different electric vehicle ETFs that you can choose from. For example, Kensho Smart Mobility ETF is a favorite among ETF investors, as is Global X Autonomous Electric Vehicles ETF.
Which mutual fund is best for electric vehicles?
Electric vehicle (EV) mutual funds are investment funds that focus on companies involved in the production, distribution, and/or servicing of electric vehicles. These funds may also include companies that produce EV components such as batteries and charging infrastructure. Some of the best EV mutual funds include the Global X Autonomous & Electric Vehicles ETF and the iShares Global Clean Energy ETF, which both have a significant allocation to EV-related companies. However, it’s important to note that the best mutual fund for electric vehicles may vary depending on an individual’s specific investment goals and risk tolerance.
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