Top ETFs For The Rare Earth Metal Trade

Rare earth metals are raw materials that you’ll find in various tech gadgets and everyday resources. These materials are hot commodities that tend to resist inflation due to how vital they are for many industries.

Luckily, you don’t need to own a mine or store a bunch of metals in your basement to get exposure to this asset class. Plenty of rare earth metal ETFs give you exposure to various rare earth metals, and you can buy shares in multiple ETFs to further diversify your portfolio.

Investors who are looking for promising rare earth metal ETFs may want to consider these funds. 

VanEck Rare Earth and Strategic Metals ETF (REMX)

The VanEck Rare Earth and Strategic Metals ETF (NYSEARCA:REMX) offers exposure to companies that produce, refine, and recycle rare earth metals. The fund has a 0.58% expense ratio and $312.5 million in total assets. 

REMX invests in 22 stocks and puts 60% of its assets into its top 10 positions. Almost one-third of the assets are in miners and companies located in China. Australia and the United States make up almost half of the total assets in the fund. 

The fund has delivered an annualized 5.6% return over the past five years, and it’s outperforming lately with a 6.7% year-to-date gain. While the fund offers exposure to many rare earth companies, there is financial risk involved since a miner can report net losses or end up deep in debt, while a rare earth metal always retains its intrinsic value.

SPDR S&P Metals & Mining ETF (XME)

The SPDR S&P Metals & Mining ETF (NYSEARCA:XME) has more than tripled over the past five years and is up by more than 20% year-to-date. It’s a strong performance that makes it a compelling watch for any investor. Furthermore, the fund only has a 0.35% expense ratio, so you’ll end up keeping most of your gains.

The fund invests in 31 stocks and allocates 49% of its capital into its top 10 holdings. All of the companies in this fund are located in the United States. Some of the fund’s top-performing stocks include Carpenter Technology (NYSE:CRS), Centrus Energy (NYSE:LEU), and MP Materials (NYSE:MP).

Interestingly, only one of these stocks is in the fund’s top 10 holdings. The fund’s top three holdings are each down sharply year-to-date, demonstrating that a few stocks in the back are doing the heavy lifting. It’s worth noting that the fund doesn’t put more than 5.5% of its capital into any individual stock.

Global X Uranium ETF (URA)

The Global X Uranium ETF (NYSEARCA:URA) prioritizes mining companies that specialize in uranium. Uranium is gaining momentum since it’s vital for nuclear energy, and you can see it in URA shares. The ETF has soared by more than 30% year-to-date and has more than tripled over the past five years. Investors view nuclear energy as an important component of artificial intelligence, and as AI grows, uranium will gain more demand.

The fund has a 0.69% expense ratio and has a trailing 12-month yield of 1.91%. The fund has 48 stocks and pours 66% of its assets into its top 10 holdings. Half of the fund’s top 10 positions have more than doubled over the past year, and four of those holdings have more than tripled.

Oklo (NYSE:OKLO) is the biggest winner among the top 10 stocks, with a return above 500% over the past year. Centrus Energy is the second top-performer in the top 10 and has more than quadrupled in a single year.

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