US passive giant launches London-listed rare earth ETF – Citywire Financial Publishers

US investment manager VanEck has further expanded its thematic exchange traded fund (ETF) range with the launch of a new product focused on rare earth and strategic metals.

The  VanEck Vectors Rare Earths and Strategic Metals Ucits ETF, which has listed on the London Stock Exchange, will invest in global companies that generate at least 50% of revenue from these commodities.

VanEck said the rare earth and strategic metals sectors stands to benefit from huge increases in technological applications, such as smart phones electric cars, wind turbines, satellite components, microchips or LCD televisions.

Martijn Rozemuller, CEO at VanEck Europe, said: ‘Strong magnets, such as those installed in wind turbines or electric motors, require, among other things, neodymium, which belongs to the rare earths.

‘Lithium is a fundamental raw material for modern batteries used in electric cars. As the decarbonisation of the economy continues, there is now fierce competition for these raw materials. The demand is already high and will certainly increase in the future.’

The udnerlying commodity make-up of the ETF is adjusted quarterly and the fund ihas a total expense ratio (TER) of 0.59%. There are 44 elements in the periodic table which meet the rare earth or strategic metals criteria and these include cobalt, manganese, tungsten and titanium.

The ETF’s assets may be concentrated in one or more sectors or industries, VanEck said.