Pop Quiz: This versatile metal, which is light enough to float on water and soft enough to be cut with a knife, has commercial applications ranging from pharmaceuticals to rocket fuel.

If you said lithium, go to the head of the class — and bonus points if you phrased your response in the form of a question, a la “Jeopardy.”

Lithium is a unique element that has been endowed with several curious properties. But you don’t need to be a chemist to appreciate the fact that this alkali metal has half the density of water, or that it has the highest specific heat of any solid. Industrial manufacturers are willing to pay hundreds of millions each year for these eccentricities.

You don’t hear about lithium as you do other raw materials, mostly because it doesn’t trade on any of the world’s commodities exchanges. But that didn’t stop prices from tripling between 2005 and 2009 or producers from spending big bucks on expansion projects to extract even more from the ground and the seas.

The reason for the investment? Lithium is a versatile product with as many uses as duct tape. You can find it in fireworks, aircraft, glass cookware and even medicine cabinets (it’s an effective treatment for bipolar disorder).

These applications drum up steady demand each year, but the real magic is that, pound for pound, this metal can store more electric energy than just about any other material. That has made lithium the battery maker’s best friend.

Lithium batteries have three main growth drivers — electric vehicles, portable electronics and wind/solar power smart grid storage. That makes a powerful 1-2-3 punch.

The catch: Unlike gold, silver and other metals, it’s virtually impossible to invest directly in lithium. There are no lithium trading pits, no futures contracts and no way to take physical possession — the metal is highly reactive and usually stored under a protective coating of petroleum jelly.

But a new exchange-traded fund (ETF) Global X Lithium (NYSE: LIT) is the next best thing, and investors have been piling in. When I covered the fund’s launch for my subscribers in August, it held only $1.6 million in assets. Less than five months later, it has attracted 100 times that amount.

Roughly, half the portfolio is invested in companies engaged in lithium mining and refinery. The big three, Sociedad Quimica y Minera (NYSE: SQM), Rockwood Holdings (NYSE: ROC) and FMC (NYSE: FMC), are the fund’s three largest positions.

These companies have diverse business lines. Last quarter, Chile’s SQM sold $34 million worth of lithium products — but fertilizer, iodine, potassium and industrial chemicals brought in $355 million. In other words, lithium accounts for less than 10% of the firm’s total revenue.

So these aren’t pure plays. But collectively, this trio accounts for about three-fourths of the world’s lithium production. And their reserves are located in Chile’s high Atacama Desert, where high lithium concentrations mean low extraction costs — and wider profit margins.

The rest of the fund’s assets are invested in a well-rounded mix of battery makers — about 15 of them — that include a hefty stake in Ener1 (Nasdaq: HEV), whose Indiana manufacturing facility will soon be rolling out advanced automotive batteries for customers like Ford Motor Co. (NYSE: F), General Motors (NYSE: GM) and the U.S. Army. You’ll also get A123 Systems (Nasdaq: AONE), which has recently landed clients such as BMW, Daimler and Navistar.

Action to Take –> In many respects, this industry is still in its infancy. So it’s difficult to say which technologies will emerge victorious and which will become historical footnotes. That means there will be some spectacular winners in this field, but also some potential losers.

That uncertainty is the perfect environment for a well-rounded fund like LIT — rather than place all your bets on one horse, you can spread it among 20 of the strongest contenders. My money says that several of these will go on to be multi-baggers within the next couple years.

[Note: Shares of LIT have been on a tear; they’ve steadily gained about 40% since I first profiled the fund in August. The long-term growth is there, but conservative investors might want to wait for a pullback.]

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