VanEck Vectors Rare Earth and Strategic Metals UCITS ETF
| Issuer: Van Eck |
| Asset Class: Equity |
| TER: 59bps |
| Trading Currency: GBP |
| Pays Income: False |
| Listing Date: 29 Sep 2021 |
| Ticker: REGB |
| ISIN: IE0002PG6CA6 |
This investment offers focused exposure to the global rare earth and strategic metals industry, a sector that forms the bedrock of numerous modern technologies and the ongoing transition to a green economy. These elements are indispensable components in high-growth areas such as permanent magnets for electric vehicle motors and wind turbines, advanced batteries, consumer electronics like smartphones and laptops, and critical defense applications. The "strategic" nature of these materials stems from their essential function and highly concentrated supply chains, which often presents geopolitical complexities and potential for supply disruptions. Investing in this theme is a play on the increasing global demand for the fundamental building blocks of future innovation and sustainability initiatives.
The fund provides a convenient and diversified vehicle to access this specialized market by investing in a global portfolio of companies that are principally engaged in producing, refining, and recycling rare earth and strategic metals. The strategy encompasses the full value chain, from mining and extraction to processing and manufacturing. By holding a basket of international companies, the investment mitigates the single-stock risk associated with trying to pick winners in the often-volatile mining industry. This approach offers a comprehensive way to gain exposure to the growth of key elements like lithium, cobalt, manganese, and the 17 rare earth elements that are crucial for technological advancement and the shift away from fossil fuels.
The core investment thesis is built on the powerful, long-term structural tailwinds of decarbonization and digitalization. As governments and corporations worldwide push for cleaner energy and more advanced technology, the demand for these specific metals is projected to grow significantly. This fund is designed for investors seeking to capitalize on this secular trend and who are willing to accept the higher risks associated with a concentrated, thematic investment. Potential investors should be mindful of the sector's inherent volatility, its sensitivity to global economic cycles, and the geopolitical risks tied to the geographic concentration of resource production.
