Nio Inc. (NIO) is gearing up for a rebound as China’s EV market heats up. The company has launched new models like the Onvo L90 SUV and expanded its battery-swap infrastructure, aiming to double deliveries by 2025. Further, the company’s push into Europe and cost-cutting efforts could help it reach breakeven by late 2025. Investors looking for exposure to Nio without buying the stock directly could consider these two ETFs: Invesco Golden Dragon China ETF (PGJ) and VanEck Low Carbon Energy ETF (SMOG).
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Let’s take a deeper look at these two ETFs.
Invesco Golden Dragon China ETF
The PGJ ETF offers exposure to U.S.-listed Chinese companies, making it a popular choice for investors looking to tap into China’s growth story without navigating mainland markets directly. It tracks the NASDAQ Golden Dragon China Index.
NIO stock constitutes 2.67% of the ETF’s holdings. Apart from NIO, some of the top stocks in the PGJ ETF are Yum China (YUMC), JD.com (JD), and Alibaba (BABA). Overall, the ETF has $140.13 million in assets under management (AUM). Also, it has an expense ratio of 0.67%. The PGJ ETF has returned 9.6% in the past three months.
Turning to Wall Street, the ETF has a Moderate Buy consensus rating. Of the 75 stocks held, 44 have a Buy, 29 have a Hold, and two have a Sell rating. At $34.42, the average PGJ ETF price target implies a 19.67% upside potential.
VanEck Low Carbon Energy ETF
The SMOG ETF provides exposure to firms driving the global shift toward renewable energy and low-carbon technologies. It tracks the MVIS Global Low Carbon Energy Index, which includes firms involved in solar, wind, hydro, hydrogen, biofuels, EVs, battery tech, and smart grid infrastructure.
Importantly, NIO accounts for 1.61% of SMOG’s total holdings. Some of the top holdings in SMOG ETF include NextEra Energy (NEE), Tesla (TSLA), and Iberdrola (ES:IBE). Overall, the ETF has $120.96 million in AUM and an expense ratio of 0.61%. Over the past three months, the SMOG ETF has generated a return of 13.56%.
On TipRanks, SMOG ETF has a Moderate Buy consensus rating based on 34 Buys, 23 Holds, and two Sells assigned in the last three months. At $121.83, the average SMOG ETF price target implies 8.43% upside potential.
Concluding Thoughts
ETFs provide indirect exposure to Nio, reducing risk compared to investing directly in the stock. Furthermore, ETFs are a liquid and transparent way to participate in the market. Investors seeking ETF recommendations might consider SMOG and PGJ, as these ETFs offer exposure to NIO stock.