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Drill Down on Green Metals and Rare Earth Elements

July 26, 2022

Read Time 4 MIN

As demand for green metals and rare earth elements continues to grow, we provide a closer look at how investors can gain exposure to metals and mining companies in this space.

Many secular trends have driven increased demand for green metals such as copper, lithium, and rare earth elements in recent years, and that demand is only expected to increase moving forward. Technological advancements—including those technologies and applications needed for the transition from fossil fuels to a low carbon economy—are expected to continue to fuel the next wave of demand.

The conflict in Ukraine has added a level of urgency to the energy transition and also raises other national security concerns, all of which can be tied back to these metals. Many rare earth elements for example are used in radar technology, jet engines, and missile defense systems, and many governments have signaled increases to defense spending.

While large, diversified metals and mining companies are heavily involved in the extraction and processing of green metals, their revenues and expenses are often far more influenced by industrial metals such as aluminum and iron ore. As a result, investors are left with few options to gain direct exposure to this long-term narrative.

The VanEck Green Metals ETF (GMET) and VanEck Rare Earth/Strategic Metals ETF (REMX) offer exposure to those companies primarily involved in producing, refining and recycling of these metals. Though it can be difficult to pinpoint the exact exposure to any one metal, both ETFs provide meaningful access to the metals taking center stage in the aforementioned secular trends.

VanEck Green Metals ETF (GMET)

GMET seeks to track as closely as possible, before fees and expenses, the price and yield performance of the MVIS Global Clean-Tech Metals Index, which is intended to track the performance of companies involved in the production, refining, processing and recycling of green metals. Green metals are metals used in the applications, products and processes that enable the energy transition from fossil fuels to cleaner energy sources and technologies.

Notable Green Metals Exposure

Notable Green Metals Exposure

Source: FactSet; VanEck. Data as of 7/22/2022. Metals exposures is based on FactSet RBICS revenue database.

Exposure is approximate and subject to change.

Top 10 Holdings and Green Metals Exposure
Holding Name % of Net Assets Green Metals Involvement*
Glencore plc 7.77 Copper, Zinc
Anglo American Plc 7.03 Platinum, Copper
Albemarle Corp 6.38 Lithium
Freeport-McMoRan, Inc. 5.9 Copper
Zhejiang Huayou Cobalt Co. 5.83 Cobalt, Lithium
Ganfeng Lithium Co. Ltd 5.04 Lithium
Teck Resources Ltd 4.7 Zinc
Grupo Mexico S.A.B. de C.V. 4.49 Copper
China Northern Rare Earth 3.49 Rare Earths
First Quantum Minerals Ltd 2.91 Copper
Total 53.54  

*Metals involvement indicates the green metals a company was involved in at the time of this report. It may not be comprehensive and does not include involvement in non-green metals. Involvement is based on publicly available information provided by each company and is not meant to indicate revenue or assets attributed to metals.

Source: VanEck; company reports. Data as of 6/30/2022.

VanEck 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 (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.

Notable Rare Earth and Strategic Metals Exposure

REMX has provided significant exposure to lithium in recent years. Generally between 40%-50% of the portfolio has been tied to lithium-related companies. Rare earths are a prominent exposure in the ETF with at least 25% of the portfolio tied to those companies involved in the extraction and processing of rare earths, according to FactSet RBICS data.

Ticker Holding Name % of Net Assets Rare Earth and Strategic Metals Involvement*
BFF5BV Zhejiang Huayou Cobalt Co., Ltd. Class A 10.58 Cobalt, Lithium
BP3R37 China Northern Rare Earth (Group) High-Tech Co., Ltd. Class A 8.19 Rare Earths
BFYQHK Shenghe Resources Holding Co., Ltd. Class A 7.29 Rare Earths
612117 Lynas Rare Earths Limited 6.89 Cerium, Lanthanum, Neodymium, Praseodymium
BLSNC7 Allkem Limited 6.30 Lithium
B2368L Pilbara Minerals Limited 6.20 Lithium, Tantalum
BZ9NS1 Ganfeng Lithium Co., Ltd. Class H 5.58 Lithium
BP3R6F Xiamen Tungsten Co. Ltd. Class A 5.23 Molybdenum, Tungsten
MP MP Materials Corp Class A 4.68 Neodymium, Praseodymium, Rare Earths
TROX Tronox Holdings Plc 4.37 Titanium, Zircon
B1J89V Liontown Resources Limited 4.28 Lithium
LAC Lithium Americas Corp. 4.27 Lithium
695757 Iluka Resources Limited 4.23 Rare Earths, Titanium, Zircon
LTHM Livent Corporation 4.01 Lithium
401701 Eramet SA 3.49 Lithium, Manganese
B4XFS8 Core Lithium Ltd 3.39 Lithium
B1Z95S AMG Advanced Metallurgical Group N.V. 2.65 Chromium, Lithium, Molybdenum, Tantalum, Vanadium
639726 Lake Resources N.L. 2.30 Lithium
SLI Standard Lithium Ltd. 2.01 Lithium
PLL Piedmont Lithium Inc 1.92 Lithium
BGYBHZ ioneer Limited 1.55 Lithium
BMTTJZ Australian Strategic Materials Ltd 0.76 Hafnium, Niobium, Rare Earths, Titanium, Zirconium
Total   100  

*Metals involvement indicates the rare earths and/or strategic metals a company was involved in at the time of this report. It may not be comprehensive and does not include involvement in non-rare earths/strategic metals. Involvement is based on publicly available information provided by each company and is not meant to indicate revenue or assets attributed to metals.

Source: VanEck; company reports. Data as of 6/30/2022.

Metals Targeted

Green Metals Rare Earth Elements and Strategic Metals
MVIS Global Clean-Tech Metals Index MVIS Global Rare Earth/Strategic Metals Index
Cerium Osmium Strategic Metals Rare Earths
Cobalt Palladium Antimony Manganese Cerium Terbium
Columbium Platinum Arsenic Molybdenum Dysprosium Thulium
Copper Praseodymium Beryllium Niobium = Columbium Erbium Ytterbium
Dysprosium Rhenium Bismuth Rhenium Europium Yttrium
Erbium Rhodium Cadmium Selenium Gadolinium  
Europium Ruthenium Chromium Strontium Holmium  
Holmium Samarium Cobalt Tantalum Lanthanum  
Indium Scandium Gallium Tellurium Lutetium  
Iridium Terbium Germanium Thallium Neodymium  
Lanthanum Thulium Hafnium Titanium Praseodymium  
Lutetium Tin Indium Tungsten Promethium  
Manganese Vanadium Lithium Vanadium Samarium  
Molybdenum Ytterbium Magnesium Zircon and Zirconium Scandium  
Natural Graphite Yttrium        
Neodymium Zinc        
Nickel Zircon        
Niobium Zirconium        

Source: MVIS.

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Disclosure

This is not an offer to buy or sell, or a recommendation to buy or sell any of the securities/financial instruments mentioned herein. The information presented does not involve the rendering of personalized investment, financial, legal, or tax advice. Certain statements contained herein may constitute projections, forecasts and other forward looking statements, which do not reflect actual results, are valid as of the date of this communication and subject to change without notice. Information provided by third party sources are believed to be reliable and have not been independently verified for accuracy or completeness and cannot be guaranteed. VanEck does not guarantee the accuracy of 3rd party data. The information herein represents the opinion of the author(s), but not necessarily those of VanEck.

An investment in the VanEck Green Metals ETF may be subject to risks which include, among others, risks related to investing in green metals, clean energy companies, regulatory action and changes in governments, rare earth and strategic metals companies, Australian, Asian issuers and Chinese issuers, investing through stock connect, foreign securities, emerging market issuers, foreign currency, basic materials sector, mining industry, small- and medium-capitalization companies, cash transactions, equity securities, market, operational, index tracking, authorized participant concentration, new fund, absence of prior active market, trading issues, passive management, fund shares trading, premium/discount and liquidity of fund shares, non-diversified, and concentration risks which may make these investments volatile in price or difficult to trade. Small- and medium-capitalization companies may be subject to elevated risk.

An investment in the VanEck Rare Earth/Strategic Metals ETF may be subject to risks which include, among others, investing in rare earth and strategic metals companies, regulatory action and changes in governments, Asian and Chinese issuers, investing through Stock Connect, Australian issuers, foreign securities, emerging market issuers, foreign currency, depositary receipts, basic materials sector, mining industry, small- and medium-capitalization companies, cash transactions, equity securities, market, operational, index tracking, authorized participant concentration, no guarantee of active trading market, trading issues, passive management, fund shares trading, premium/discount risk and liquidity of fund shares, issuer-specific changes, non-diversified and concentration risks, all of which may adversely affect the Fund. Investing in Chinese issuers involves risks which include, among others, lack of liquidity and price volatility, currency devaluations and exchange rate fluctuations, intervention by the Chinese government, nationalization or expropriation, limitations on the use of brokers, and trade limitations, all of which may adversely affect the Fund. Investments made through Shanghai-Hong Kong Stock Connect are subject to trading, clearance and settlement procedures that are untested in the People’s Republic of China (PRC), which could pose risks to the Fund. Foreign and emerging markets investments are subject to risks, which include changes in economic and political conditions, foreign currency fluctuations, changes in foreign regulations, changes in currency exchange rates, unstable governments, and limited trading capacity which may make these investments volatile in price or difficult to trade. Small- and medium-capitalization companies may be subject to elevated risks.

Investing involves risk, including possible loss of principal. Please call 800.826.2333 or visit vaneck.com for a free prospectus and summary prospectus. An investor should consider investment objectives, risks, charges and expenses of the investment company carefully before investing. The prospectus and summary prospectus contain this and other information. Please read the prospectus and summary prospectus carefully before investing.

Disclosure

This is not an offer to buy or sell, or a recommendation to buy or sell any of the securities/financial instruments mentioned herein. The information presented does not involve the rendering of personalized investment, financial, legal, or tax advice. Certain statements contained herein may constitute projections, forecasts and other forward looking statements, which do not reflect actual results, are valid as of the date of this communication and subject to change without notice. Information provided by third party sources are believed to be reliable and have not been independently verified for accuracy or completeness and cannot be guaranteed. VanEck does not guarantee the accuracy of 3rd party data. The information herein represents the opinion of the author(s), but not necessarily those of VanEck.

An investment in the VanEck Green Metals ETF may be subject to risks which include, among others, risks related to investing in green metals, clean energy companies, regulatory action and changes in governments, rare earth and strategic metals companies, Australian, Asian issuers and Chinese issuers, investing through stock connect, foreign securities, emerging market issuers, foreign currency, basic materials sector, mining industry, small- and medium-capitalization companies, cash transactions, equity securities, market, operational, index tracking, authorized participant concentration, new fund, absence of prior active market, trading issues, passive management, fund shares trading, premium/discount and liquidity of fund shares, non-diversified, and concentration risks which may make these investments volatile in price or difficult to trade. Small- and medium-capitalization companies may be subject to elevated risk.

An investment in the VanEck Rare Earth/Strategic Metals ETF may be subject to risks which include, among others, investing in rare earth and strategic metals companies, regulatory action and changes in governments, Asian and Chinese issuers, investing through Stock Connect, Australian issuers, foreign securities, emerging market issuers, foreign currency, depositary receipts, basic materials sector, mining industry, small- and medium-capitalization companies, cash transactions, equity securities, market, operational, index tracking, authorized participant concentration, no guarantee of active trading market, trading issues, passive management, fund shares trading, premium/discount risk and liquidity of fund shares, issuer-specific changes, non-diversified and concentration risks, all of which may adversely affect the Fund. Investing in Chinese issuers involves risks which include, among others, lack of liquidity and price volatility, currency devaluations and exchange rate fluctuations, intervention by the Chinese government, nationalization or expropriation, limitations on the use of brokers, and trade limitations, all of which may adversely affect the Fund. Investments made through Shanghai-Hong Kong Stock Connect are subject to trading, clearance and settlement procedures that are untested in the People’s Republic of China (PRC), which could pose risks to the Fund. Foreign and emerging markets investments are subject to risks, which include changes in economic and political conditions, foreign currency fluctuations, changes in foreign regulations, changes in currency exchange rates, unstable governments, and limited trading capacity which may make these investments volatile in price or difficult to trade. Small- and medium-capitalization companies may be subject to elevated risks.

Investing involves risk, including possible loss of principal. Please call 800.826.2333 or visit vaneck.com for a free prospectus and summary prospectus. An investor should consider investment objectives, risks, charges and expenses of the investment company carefully before investing. The prospectus and summary prospectus contain this and other information. Please read the prospectus and summary prospectus carefully before investing.