This stock gets a 94 out of 100 (From Stansberry Research)
At a Glance
- Rare earths have been the bright spot for the materials sector since being labeled a national security priority by the Trump administration.
- Since the market’s bottom in April 2025, the VanEck Rare Earth and Strategic Metals ETF is up 146%.
- So far this year, the fund is already up 13% and is likely to continue rewarding shareholders as the White House continues to prioritize the rare earths industry.
The materials sector doesn't get a lot of love. After finishing last among all 11 S&P 500 sectors in 2024, it mustered a 10% gain last year, which trailed the broad market.
But as with any sector, there were bright spots amid the underperformers. And for one industry in particular, that momentum is likely to continue propelling materials this year.
Rare earths made headlines last year as President Donald Trump declared them a national security priority and made several moves that bolstered the performance of individual rare earth stocks as well as the funds that hold them.
That includes the VanEck Rare Earth and Strategic Metals ETF (NYSEARCA: REMX), which is up a staggering 146% since the market’s bottom in April 2025.
FREE Report: 4 "America First" Stocks Poised to Soar Under Trump's New Tariffs
President Trump's second term is officially underway—and during his first 100 days are already delivering bold moves on tariffs, energy, defense, and trade.
Click here to get your free report, 4 "America First" Stocks That Could Soar Under Trump's New Tarif
Rare Earths and the Trump Effect
Rare earths include 17 metals that are essential for everything from smartphones and wind turbines to defense systems, EVs, and medical devices. The companies that produce, refine, and recycle them have enjoyed tailwinds beginning in Trump’s first term.
In 2019, the president stated that they were essential to national defense, and in 2025, during his second term, Trump signed an executive order launching an investigation into the national security risks posed by U.S. reliance on imported and processed critical minerals from countries like China.
Additional efforts have included the administration invoking the Defense Production Act in an effort to bolster the domestic supply of rare earths, as well as directing the Department of Defense to prioritize mineral production.
Those measures and others were outlined in a fact sheet the White House released in April 2025 that detailed the United States’ critical mineral future, which refers to rare earths as central to the country’s security and economic stability.
The first notable impact of that policy was the administration’s $400 million investment—equating to a 15% stake—in Las Vegas-based MP Materials (NYSE: MP), a vertically integrated producer of rare earth materials in North America.
As a result, since the start of 2025, MP Materials has gained 243%. But for investors who prefer ETFs to speculating on individual companies, the VanEck Rare Earth and Strategic Metals ETF could be the second-best thing.
An ETF for Global Rare Earth Exposure
Industry consultancy firm Grand View Research forecasts the rare earths market to increase from $3.95 billion in 2024 to $6.28 billion by 2030, a nearly 59% increase.
For investors looking to gain exposure, the REMX ETF can offer access to global companies, which is important given Grand View Research’s finding that the Asia Pacific region accounts for approximately 86% of the rare earths market share.
According to its prospectus, the VanEck Rare Earth and Strategic Metals ETF aims to replicate, as closely as possible, the price and yield performance of the MVIS®Global Rare Earth/Strategic Metals Index (MVREMXTR), which is intended to track the overall performance of companies involved in producing, refining, and recycling of rare earth and strategic metals and minerals.
The ETF carries a net expense ratio of 0.58%, which is entirely offset by its dividend, which currently yields 1.53%.
Among its 32 holdings, Albemarle (NYSE: ALB)—a company that is widely noted as the world’s largest lithium producer—is the ETF's top position with a weighting of 8.22%. While lithium is not considered a rare earth, Albemarle leverages rare earths in its chemical processes, which in turn makes the company a critical player in the materials supply chain.
But what makes the REMX such an attractive fund is that it provides shareholders with global diversification. In fact, by geographic exposure, the ETF holds companies spanning nine countries, including sizable allocations to the following nations:
- China: 28.4%
- Australia: 22.9%
- United States: 22.9%
- Canada: 14.1%
- Netherlands: 3.4%
The fund’s sixth-largest holding—Sociedad Quimica y Minera (NYSE: SQM)—is the world’s second-largest lithium producer, but also a maker of specialty chemicals and minerals. Over the past year, the Santiago, Chile-based company has seen its shares gain more than 91%.
In short, the VanEck Rare Earth and Strategic Metals ETF’s ability to provide investors with exposure to mineral mining and producing stocks that operate in the United States, Asia, Europe, and developing markets can help insulate portfolios from risk through global diversification.
We've found The Next Elon Musk… and what we believe to be the next Tesla.
It's already racked up $26 billion in government contracts.
Peter Thiel just bet $1 Billion on it.
👉 Unlock the ticker now and get it completely free.
What Wall Street Thinks About the VanEck Rare Earth and Strategic Metals ETF
That lower risk profile is one reason Wall Street’s bears are shying away. Despite the fund’s enormous gains since the start of last year, current short interest stands at just 2.14%, or a paltry 404,528 shares out of the fund’s 22 million shares outstanding.
At the same time, institutional ownership has been predominantly bullish. Over the past 12 months, buyers have outnumbered sellers 96 to 27, with inflows of nearly $119 million easily surpassing outflows of just over $15 million—a gap of 87%.
Read this article online ›
No comments:
Post a Comment