Commodities & Metals
Rare Earth ETF Shows Global Theme (REMX, TIE, TC, RTI, MCP, GMO, REE)
Published:
Last Updated:
Van Eck Global has a history of launching niche ETF products. Today’s launch of Market Vectors Rare Earth/Strategic Metals ETF (NYSE: REMX) is no exception. This new ETF is the first ETF for US investors that offers a pure-play on equities of the companies whose businesses are geared around the production, refining, and recycling rare earth materials. This is a hot sector currently, and the sector has many cult stock candidates in it. US-traded components are as follows: Titanium Metals Corporation (NYSE: TIE) 6.7%; Thompson Creek Metals Company Inc. (NYSE: TC) 6.3%; RTI International Metals, Inc. (NYSE: RTI) 5.6%; Molycorp Inc. (NYSE: MCP) 4.1%; General Moly, Inc. (NYSE: GMO) 2.4%; Rare Element Resources Ltd. (AMEX: REE) 2.5%.
The rare earth ETF aims to track the Market Vectors Rare Earth/Strategic Metals Index. The index is a modified-capitalization weighted and float-adjusted index. The companies inside the index must have the capacity to generate more than 50% of their revenues from rare earth materials and strategic metals. As of October 13, 2010, the index was comprised of 24 stocks from Australia, Canada, China and the United States. The Chinese stocks are limited to those which are currently available to foreign investors via the H-shares. The above mentioned come to less than 30% of the combined weighting of the entire ETF, hence the large international focus. Other internationally traded stocks included in the index/ETF are as follows:
REMX has a gross expense ratio of 0.63% and a net expense ratio of 0.57%.
Rare earth and strategic metals are industrial metals are needed for a whole host of industries, from basic metals production to defense to alternative energy to batteries and on and on. Some are known like Manganese, Titanium and Tungsten, but others such as Bastnasite, Cerium, Lanthanum, Praseodymium, Neodymium, and Europium are hardly known by most people.
This ETF created a large run in several of the components listed here. After barely an hour, we have seen over 700,000 shares trade. This is a hot sector in rare earth elements and rare earth oxides, and this ETF is one which needs to be watched very closely. Most ETFs are meant to track indexes, but the nature of this ETF could actually be an example where an ETF actually creates a move in the underlying stocks more than others. Most rare earth companies are not exactly the world’s largest companies.
If you end up with a figure of $2 billion (a theoretical figure of course) for the size of the ETF, imagine what this would do to some shares of these companies. As noted yesterday, this is a tail that could easily wag the dog.
You can join our free daily email distribution list to hear more about dividend trends, analyst upgrades and downgrades, top day trader and active trader alerts, news on Buffett and other investment gurus, IPOs, secondary offerings, private equity, and more.
JON C. OGG
Credit card companies are at war. The biggest issuers are handing out free rewards and benefits to win the best customers.
It’s possible to find cards paying unlimited 1.5%, 2%, and even more today. That’s free money for qualified borrowers, and the type of thing that would be crazy to pass up. Those rewards can add up to thousands of dollars every year in free money, and include other benefits as well.
We’ve assembled some of the best credit cards for users today. Don’t miss these offers because they won’t be this good forever.
Flywheel Publishing has partnered with CardRatings for our coverage of credit card products. Flywheel Publishing and CardRatings may receive a commission from card issuers.
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.