The investment in rare earths can be interesting for investors, as these raw materials play a central role in many future-oriented technologies such as e-mobility and renewable energies. Despite a preliminary agreement in the US-China trade dispute, the supply of rare earths remains tense, offering opportunities for investors. Here are some of the best stocks and ETFs for investing in rare earths:
Stocks
Lynas Rare Earths: Lynas is an Australian mining company that specializes in the exploration, development, extraction, and processing of rare earths. The stock has experienced strong price movements in the past and remains an important player in the market.
MP Materials: MP Materials is the largest western company in the field of rare earths and produces rare earth concentrate as well as refined rare earth oxides. With a market capitalization of about $5 billion, it is a significant player in the industry.
Jl Mag Rare Earth: The Chinese producer Jl Mag Rare Earth recently received approval for the export of rare earths, leading to a surge in stock prices. This could be an interesting investment, particularly in the context of geopolitical developments.
ETFs
VanEck Rare Earth and Strategic Metals ETF (REMX): This ETF invests in companies that generate at least 50% of their revenue from rare earths or strategic metals. It offers broad diversification across various producers, refineries, and recyclers.
ETFs on Disruptive Materials: These ETFs focus on raw materials that play a role in future-oriented areas such as e-mobility or renewable energies. They provide a way to invest in a portfolio of mining and material companies, spreading the risk.
ETFs on Essential Metals: These ETFs concentrate on metals that are necessary for critical sectors of the economy, including rare earths. Companies like Anglo American and Freeport-McMoRan are heavily represented in these ETFs.
Opportunities and Risks
Opportunities: The rising demand for rare earths due to their role in future-oriented technologies offers investors the chance to benefit from this trend.
Risks: Geopolitical tensions, particularly between the USA and China, can affect the supply of rare earths and cause price fluctuations. Additionally, there are risks from oversupply and macroeconomic headwinds.
Overall, stocks and ETFs in the rare earth sector offer an interesting investment opportunity that should be carefully weighed to minimize risks.