Want to invest in China’s booming EV market? These ETFs could offer a good way in

As China’s electric vehicle market goes from strength to strength, investors worldwide are showing a growing interest in getting involved. “We’re particularly bullish on this fanning out of Chinese competitiveness in EV makers,” Kingsley Jones of boutique advisory firm Jevons Global told CNBC’s Pro Talks on Thursday. “There’s lots of them.” The chief investment officer singled out BYD , which recently beat Tesla to become the top global EV maker, as a “favorite” car maker, and battery-making giant Contemporary Amperex Technology ( CATL ). But significant hurdles remain for retail investors before they can be part of China’s EV growth story. For example, many stockbrokers charge a premium to trade Hong Kong-listed stocks, and Chinese regulations prevent retail investors abroad from buying mainland-listed “A-shares” directly. Kingsley acknowledged that CATL, which has doubled its annual sales every year since 2020, was “very difficult for retail investors to buy”. The Chinese battery maker has deals with BMW , Merecedes , Hyundai , Honda , Li Auto and NIO among others. However, the veteran investor pointed out that ETFs with concentrated positions remain viable options for those seeking exposure to the Chinese EV growth potential. ETFs for China EV investments For instance, the Amplify Lithium & Battery Technology ETF (BATT) and CoreValues Alpha Greater China Growth ETF (CGRO) are two such funds that enable U.S. and Europe-based investors to buy into restricted Chinese shares. BATT provides broad exposure to the EV supply chain with holdings in advanced battery materials and technology companies globally. CATL is among the fund’s top 10 holdings at 6.6% weighting. The fund also has a 5% position in Chinese EV maker BYD, according to FactSet data. Jones, who has been a portfolio manager for over 20 years, revealed to CNBC Pro Talks on Thursday that he had bought more shares of BYD in recent weeks since the stock has slumped 13% this year. “Technically, we think the valuation is reasonably attractive for the growth rate that they’re posting. But the most important thing of all is the news flow on their model releases is all positive,” he added. He also noted that BYD is posting solid sales momentum within China and in export markets like Australia, where EV penetration rates are high. “I happen to live in the bush capital in Canberra, and we are the biggest adopters of EVs in terms of penetration in Australia…now I see more and more of [BYD cars],” Jones said. The median analyst rating on BATT’s holdings is a Buy, with a price target implying a 48.7% upside from current levels. BATT CGRO 1Y line Similarly, the China-focused CoreValues Alpha Greater China Growth ETF gives investors access to BYD as its second-largest holding at 7.87% weighting, while CATL features at 3.65%. Nearly 4% of the fund is also invested in Xiaomi , a smartphone maker Jones said he was “keenly watching” as an interesting option given its plans to launch an electric vehicle called the SU7. More than 85% of analysts have a buy rating on the stocks held by CGRO and expect the ETF to rise by 44.3% over the next 12 months to $27.3.