Precious metals like gold, silver, platinum, and palladium can help add diversification to an investor’s portfolio with real assets, but they’re not the only metals play on the block. Investors can also look at rare earth metals in the convenience of an ETF wrapper via the VanEck Vectors Rare Earth/Strategic Metals ETF (REMX ).
REMX seeks to replicate as closely as possible, before fees and expenses, the price and yield performance of the MVIS® Global Rare Earth/Strategic Metals Index. The fund normally invests at least 80% of its total assets in securities that comprise the fund’s benchmark index.
The index includes companies primarily engaged in a variety of activities that are related to the producing, refining, and recycling of rare earth and strategic metals and minerals. A number of its top holdings are in China, which also gives investors international exposure to the second-largest economy.
- One-Trade Access to the Rare Earth/Strategic Metals Industry: A highly volatile industry that supplies key inputs to many of the world’s most advanced technologies
- Pure Play, Comprehensive Global Exposure: Companies must derive at least 50% of total revenues from the rare earth/strategic metals industry to be added to the Index and may include A-shares issued by Shanghai-listed companies trading via Shanghai-Hong Kong Stock Connect
- Industry Known for Volatility: Rapidly changing supply and demand dynamics, government defense implications, and heavy China involvement have driven significant volatility in the industry historically
REMX Turns the Volume Up
In the 6-month chart above, you can see that rare earth metals have been piquing investor interest as of late. The noticeably higher volume has been apparent in REMX this fall.
“We have been writing positive stories about rare earths since the summer. In our July 24 article, we presented some charts of the VanEck Vectors Rare Earth/Strategic Metals ETF (REMX),” a Real Money article said. “The investing world has taken notice of the supply/demand situation with rare earth metals, so this is a good time to check out the charts of REMX again.”
As stated, the technicals in price action support the reason for the higher volume.
In the daily bar chart of REMX, below, we can see that prices have soared 50% in a few weeks! REMX is trading above the rising 50-day moving average line and stands 50% above the rising 200-day moving average line," the article added. “The trading volume has been increasing since late October and the On-Balance-Volume (OBV) line has been strong since late September. The Moving Average Convergence Divergence (MACD) oscillator is above the zero line but has crossed lower to a take profits mode.”