Under the Spotlight: BetaShares Energy Transition ETF ($XMET)

ICYMI: Do your own research and make your own decisions. This article drills down on a specific company, however, it is not a recommendation to invest in the company and should not be taken as financial advice. Got a stock you want covered? Tell us here.

As governments urge people to work from home or take public transport to avoid worsening fuel shortages, some Australians have started looking for a more permanent fix: cars that don’t need petrol at all.

There’s been a spike in searches for electric vehicles and brands like Tesla ($TSLA) in recent weeks, as oil prices remain high and petrol stations run out of gas. CAR Group ($CAR) says EV searches have tripled in March compared to February.

Investors are taking notice too. For those looking for an alternative way to play the energy shift, beyond oil ETFs like $OOO and $USO, the BetaShares Energy Transition ETF ($XMET) is worth a look.

The ETF tracks companies that produce the materials essential to electrification and renewables. That includes copper, lithium, rare earths, silver and other industrial metals that sit at the centre of the energy transition.

Performance has reflected that theme. Over the past 12 months, $XMET has been one of the top performing ETFs on the ASX, returning roughly 80%, despite a March steep correction.

Before the pull back, that figure was closer to 135%.

The energy transition?

The shift away from fossil fuels has been underway for decades. What has changed in the last couple of years is the scale.

Renewables now supply around 30% of electricity generation, according to the International Energy Agency (IEA). And 80% of growth in global energy generation comes from either renewables or nuclear. 

At the same time, global energy demand for oil is slowing, with the share of total energy demand falling below 30% for the first time ever in 2024.

This trend is a headwind for precious metals producers. Electric vehicles, battery storage and renewables – and AI data centres – all require huge amounts of metal. Copper alone is often described as the metal of electrification because of its role in wiring, grids and electronics.

That’s seen companies like BHP Group ($BHP) and Rio Tinto ($RIO) pivot from their core iron ore operations to prioritise copper production.

Most of the companies inside $XMET sit in that picks and shovels category. Rather than building windfarms or EVs, they’re supplying the ingredients that make them possible.

Big Diggers

$XMET is, at its core, a materials ETF.

Most of its holdings are miners, refiners or processors of industrial metals. About 17% of the portfolio is allocated to Australian companies, reflecting the ASX’s heavy exposure to resources.

Its top holdings include Australian firms Lynas Rare Earths ($LYC), Pilbara Minerals ($PLS) and BHP Group ($BHP), as well as numerous global miners from Canada, the U.S., Chile and others.

The fund’s largest holding, Lynas Rare Earths ($LYC), produces sought after rare materials like neodymium and praseodymium, which are used in EV motors, wind turbines and defence technology. 

The fund’s exposure to precious metals means it comes with the usual commodity cycle risks. Materials stocks tend to move with global growth expectations, Chinese demand and commodity prices.

That was clear in 2025. Mining stocks rallied strongly as copper and uranium prices surged and investors rotated back into real assets. Companies linked to electrification themes were among the biggest beneficiaries.

In recent weeks, the sector has pulled back as commodity prices cooled and global growth concerns resurfaced. That weakness has flowed through to thematic ETFs like $XMET.

For investors, that highlights the trade-off. You get exposure to a powerful structural trend, but you also inherit the volatility that comes with commodity markets.

Stacking up

$XMET’s not the only way to invest in the energy transition on the ASX, but it takes a different route from most.

Many ETFs in this space focus on the companies selling the end products. Funds like Global X Battery Tech & Lithium ETF ($ACDC), VanEck Global Clean Energy ETF ($CLNE) and Betashares Electric Vehicles and Future Mobility ETF ($DRIV) typically hold EV makers, battery producers and renewable energy companies. 

Betashares Climate Change Innovation ETF ($ERTH) goes broader again, mixing in industrials and tech firms tied to decarbonisation.

$XMET, along with the Global X Green Metal Miners ETF ($GMTL), sits further upstream. Instead of backing manufacturers, it focuses on the miners producing the raw materials, like copper, lithium, nickel and rare earths. The inputs rather than the finished products.

Here’s how these funds have performed over the last 12 months (to March 26, 2026): 

• BetaShares Energy Transition ETF ($XMET): 82%

• Global X Green Metal Miners ETF: ($GMTL): 73.64% 

• Global X Battery Tech & Lithium ETF ($ACDC): 68.47%  

• VanEck Global Clean Energy ETF ($CLNE): 60.47% 

• Betashares Electric Vehicles and Future Mobility ETF ($DRIV): 13.41%

• Betashares Climate Change Innovation ETF ($ERTH): 12.51% 

Because of its materials base, $XMET can sometimes outperform when metals rally, but lag when investor enthusiasm shifts back toward growth stocks. 

It’s also sensitive to oil prices. Higher fuel costs weigh on energy intensive mining companies and hurt their bottom line. $XMET’s price has fallen 17% in the last month after oil prices spiked. Likewise, $GMTL has fallen 13%. 

$XMET’s management fee (MER) at 0.69% is a little above average, particularly so for a passively managed fund, though on par with the others on the list. 

Is it a buy?

$XMET is ultimately a thematic ETF. That means the key question is not just valuation, but whether you believe the theme still has room to run.

The bull case is straightforward. Electrification, AI infrastructure and renewable energy all require more metals. If that demand continues rising, companies supplying those inputs could benefit.

The bear case is just as simple. Commodity prices are cyclical, mining stocks are volatile and thematic ETFs can fall out of favour quickly when market narratives change.

For long-term investors, $XMET may make more sense as a satellite position rather than a core holding. It is a way to express a view on electrification and resource demand, but probably not something most portfolios would rely on alone.

As always with thematic funds, timing and patience both matter.

This is not financial advice nor a recommendation to invest in the securities listed. The information presented is intended to be of a factual nature only. Past performance is not a reliable indicator of future performance. The author of this article and other employees of Stakeshop Pty Ltd may hold positions or have financial interests in the company (or companies) discussed above. As always, do your own research and consider seeking financial, legal and taxation advice before investing.