Rare Earth Boom: 3 ETFs to Buy Now.

It's one of the most exciting sectors in the  market, but right now it's on a really big   pullback. Is it time for a turnaround? Joining  us today is Marketbeat analyst Chris Marotch   with a look at three ways to invest in rare  earth minerals. Chris, this is a huge topic   that really came up last year, just about a  year ago, and it started to work its way up   to those highs it saw towards the end of last  year. But for most of 2026, it seems like most   of this sector has really been on a downtrend.  This is a case where the stocks got ahead of the   story a little bit. Uh there's no question that  this is going to be a sector for investors to be   looking at for the next 3 to five to 10 years.  Um but the stocks really got overextended and   they've been on a little bit of a pullback then.  But I think that's an opportunity. Yeah, it's an   opportunity and there are so many names to look  at within that opportunity. when you talk about   rare earth minerals uh sometimes referred to rare  earth mining it covers such a wide area and really   a vast number of companies right now. So what  do we specifically mean when we talk about this   type of opportunity in the market? That's a good  question Bridget and it's important to know. So,   when we're talking about rare earth metals, we're  talking about a group of 17 specific metallic   elements that have unusual magnetic, optical,  constructive properties. The key for investors to   realize as far as why this is such an investable  theme is that these metals are baked into almost   everything that's driving the current market.  You know, we're talking about defense systems,   um, AI and semiconductors, uh, EVs, wind turbines,  cell phones. You just simply can't have a modern   economy without these metals. And that's why  they're so critical. They're so critical. And   until recently, most of these critical minerals  have been coming from overseas somewhere, right?   Yeah. Primarily from China. And that's where it's  important for investors to really understand kind   of separate the myth from the reality because  part of the myth is that rare earths only exist   in China and that's not the case at all. Actually  rare earth uh metals are fairly u I wouldn't say   prolific but I would say they're common in many  countries including the United States in Canada   and Australia. But what the key has been and where  the bottleneck has occurred is that China has   in the last several decades has been doing the  work to refine the rare earth metals into that   form that can be used for all these applications  that we needed. So they have those refineries,   they have that whole process down and that takes  infrastructure that takes years to build. And we   know part of this rare earth story. Again, we're  about to get into the three ways to invest here   that Chris is talking about. And it's different  from what we normally hear on this channel. So,   I'm excited to talk about it. But what we're  talking about is building an infrastructure that   takes a lot of money and a lot of time. And we  know the US government has actually been invested   in this with some specific companies. And those  are names we've talked about quite a bit. Chris,   is that impacting this market, too? You're you're  hitting on a really important point, Bridget.   This is a long-term story and you've got some  investors that they kind of think that they want   to be in this for the long haul until the market  gets overheated or until there's a pullback and   then they decide they want to get out. This is  a story that's going to play out over time and   you're going to see you're going to see some peaks  and valleys, some ups and downs. You're going to   have to be willing to ride with that volatility.  But if you believe in the structural case that the   economy simply isn't going to be able to function  without these metals and the United States and   other countries are aggressively trying to build a  an infrastructure to not only mine for but refine   these metals, then you kind of know that over  time the general trend is going to be up into the   right. It's just going to be depending on where  you get in and how you get in. And that's where   exchange traded funds, ETFs may be a good option  for some investors. Yeah, that's a great segue,   Chris, into what we are going to talk about today.  Chris has three ETFs for us to talk about. All of   them approach the rare earth sector in a different  way. And so, I'm excited to dive into these three   names and also talk a little bit more about ETFs.  We've heard from plenty of our viewers who've been   asking us to cover different ETFs because I know  for some investors, Chris, there's a preference   to look at ETFs to help avoid or at least not  feel so much of the volatility that picking   individual stocks can bring to your portfolio,  especially stocks that can so easily move on   good news or bad news. And so that's where these  ETFs really come into play for investors. If you   are someone who really likes ETFs, make sure to  check out this new article on Market Beat 2. It's   three active ETFs to ride the hands-on management  trend. A little bit of a different headline there,   but it's different ETFs that are very uniquely put  together. And if you want to take a look at that   article, it's a free look uh and another list  and explanation of to why those names are are   interesting for investors to look at. Scan the QR  code or click that link down in the description.   It'll take you right to that article on Market  Beads. And Chris, let's talk about before we get   to the first ETF name here, what you like about  ETFs as an investor. I don't always love ETFs. Um,   I kind of I I enjoy the hunt and I enjoy looking  for specific companies to invest in in specific   sectors. However, I I am invested in a couple of  ETFs and I like ETFs in the rare earth space for   a couple of reasons. The first is um if you think  about things like gold mining stocks or uranium   mining, this is a this is a specialty business  model. There's a lot of things that are very   complicated about their business model. This isn't  like um you know a McDonald's business model or   uh you know or even like an Exxon Chevron business  model. There's a lot of different things that   investors have to consider. And if you don't have  the time or the expertise in that sort of field,   picking individual stocks can carry a great deal  more risk. That's where the ETF comes in. You're   kind of outsourcing that uh due diligence to to  a certain extent to people who have already done   it and they've said here's a basket of stocks.  your trade-off is, and I heard this said once by   uh a former uh market market B colleague who  she said, you know, you're taking the trash   with the treasure with ETFs. And I think that's  the concern. But I think in this case with rare   earths, the benefit outweighs that risk because  you're really trying to make sure that you get   exposure to the sector, but you're taking away  the larger risk of saying, "What if I pick one or   two stocks and I'm wrong?" Yeah. I I think every  investor can relate to that feeling of picking a   stock that you're excited about and you're wrong.  I think if you're especially in some of these more   upand cominging developing small cap names, which  many of these are, uh that tends to be the case.   They're not all going to be winners. That that  that is that is the the risk that you play in the   small caps area. And that is why an ETF in this  sector is really interesting. Let's get to the   first one. Again, I mentioned earlier all three of  these are structured a little bit differently. So,   what's the first ETF that you're looking at in  rare earths? Of the three ETFs I'm going to talk   about, this one's the most direct pure play on  this whole idea of mining and processing and   refining rare earth metals. And the comp the uh  ETF is the VANC rare earth and strategic metals   ETF. Uh the ticker symbol is RMX. So, this is  tracking a list of global companies that mine,   refine, or recycle rare earth strategic minerals.  And again, it's the most direct way to play that   theme. All right. So, when you say most direct,  what does that mean? Is every stock within this   ETF uh directly tied to that? Is it maybe a more  narrow list or there not as many names on it? Um,   a little bit of both. Yes, they are all  directly tied to that theme. And also,   this is a market cap weighted index and it's only  got 38 holdings. That's not a ton. There's a lot   of ETFs that have 50 or more stocks in it. So,  this one's only got 38. Albamar is the is the   uh top holding by weight at around 7.2%. Uh the  fund only has and I say only only has about $2.4   billion of assets under management. It's got a net  expense ratio of 0.58% which is okay. I mean it's   it's not a low expense ratio but it's probably  what you would expect to pay for an ETF that's   in a sector like this. So this is the biggest pure  play on the rare earth stocks and direct ties. How   has the stock performed in the last few months  especially because many of these very direct rare   earth stocks have had a really rough last couple  of months. As of today when we're taping this,   the stock's up just a little over 65% um in the  last 12 months. But what's been interesting is as   you pointed out, Bridget, it's had a really sharp  pullback about 22% in the last 3 months. Now, some   investors will hear that and they'll say, "Well,  have I missed it or is it time to buy the dip?"   I think the interesting thing is even with this  22% pullback, the stock is still trading in about   the middle of its of its 52- week range. So  that really isn't saying that the thesis is   wrong. It's just saying that maybe the stock got  a little bit overheated and now it's pulled back.   And that could give investors a really nice entry  point right now. rather than try to figure out and   try to time where a bottom might be. This might  just be a good point to get in and say, "Okay,   it's well off the highs and that gives you a  lot of room to grow." I think it's the best   argument for looking at rare earths right now is  so many retail investors in particular tend to pay   attention to stocks when they're hot, when they're  in all the headlines, when everyone is talking   about it. And I think now is a really interesting  time to be looking at adding a position in the   rare earth sector because of that pullback. The  same question I always have though when we talk   about a sector pulling back, was this a necessary  pullback? Could it pull back even more? Um or do   you think that this is an or do you think that it  has pulled back enough that is attractive to get   into? So I I think the answer to both questions is  yes, which may sound contradictory, but you know,   you can't really time the market and there's  always a possibility that these stocks could   go could have further to drop. Okay. Um it's this  is a multi-year story. We're only at the beginning   of that story. There's a possibility that this  that this ETF and the stocks involved could have   further to drop. But if you believe in the long  term, you know, the thesis that we are act that   the United States among other cries is trying to  actively move that supply chain for refining these   rare earths onshore. then you would say you kind  of have to pick an entry point and then just sort   of play with your exposure from there. Buying,  you know, buying the stock down as it goes down or   just, you know, riding the stock up as it goes up.  But I think again the the idea is this is the time   to get exposure to this market and with the stock  pulling about it's had a 20% pullback. That's a   pretty good time to get in. Now let's move on to  the second ETF you're looking at because the stock   story uh going to be somewhat similar for all  three of these ETFs but at least a little bit   different because they are set up differently.  What's different about this second ETF you're   looking at? Right. So the second one we're talking  about is the Global X Rare Earth and Critical   Materials ETF. The ticker symbol is E A R T. So  Earth without the H. Where this is different is   this ETF is far more targeted at the application  side of rare earths. So rather than the extraction   and refining, which it does do some of that, this  ETF has companies that um produce the rare earths   components and raw materials that are needed  for specific applications, EVs, energy storage,   robotics, radar systems. So it's less about  the supply chain and it's more about the end   applications for that. All right. So give us some  specific examples. What holdings are in this ETF?   You've got names like Freeport Macaran. That's  one of the top names uh by weight in this. Uh   you've also got Southern Copper. Albam Marl again  comes up in this one. And as well as MP materials   which is more of a pure play on Rear Earth.  So, like I said, you're getting a little bit   of broader exposure, but in areas that are more  application specific. There's about, by the way,   there's about 50 holdings in this fund. So, like  we said, the other one only had about 38. This has   about 50. And you're talking about 40 million  in assets under management, an expense ratio   of around 0.59%. So, it's very comparable to what  you would have with the REMX. Let's talk about the   number of holdings in this ETF and and how that  can impact the stock. Does it help maybe level   out some of the volatility the more names that you  have in an ETF or is that not always the case? Um   I think in general it's supposed to be because the  idea is if you have more holdings then no holding   is going to have an excessive amount of weight in  the fund. In this case, uh, the largest waiting by   percent is Anglo-American PLC with 5%. So again,  no holding in the fund carries more than 5% of the   weight. That's the way to diversify that risk. Of  course, critics would say that's a way of limiting   your upside too. But I think again more investors  are when they gravitate towards an ETF, they're   gravitating towards it for the idea of limiting  the risk, not so much maximizing the gain. Yeah,   I think now is a really good time when we're  talking about uh minimizing the risk to just do   a comparison to uh one of the biggest pure plays  out there and that's USR. This is a name that   comes up all the time on this channel and you look  at that chart compared to what's happening in this   ETF and the volatility is definitely different.  There's far uh bigger spikes in US which is why   some people prefer picking individual stocks but  there's uh much sharper drops with this name as   well. And so I think you can just see that in the  chart comparison of um you're in for a different   kind of ride with the rarer story if you look at  an ETF versus an individual stock. And again that   I want to discuss that argument a little bit that  some investors have of I don't like ETFs because   you can't get the same kind of really big gains  that you can in an individual stock. But you look   at US that one is up 60% for the year. And this  ETF with 50 holdings is up 50% for the year. So,   they both have had a really strong last 12 months  even with this recent pullback. really it comes   down to uh I I really think a lot of it comes down  to an investor's disposition rather than their   knowledge because there's a lot of people that  invest in this space or in any other space and   they really don't necessarily have the knowledge  of the industry but it really comes down to your   disposition in the idea of are you able to absorb  that volatility? Is that something that's going to   keep you awake at night? Are you is if this if the  stock drops 20 to 30% in 3 months, are you going   to be panicking and saying you've got to get out  of it? Because that's not a healthy way to invest.   It's not a healthy way to live, but it's also not  a healthy way to invest. But if you're willing to   ride out that volatility, if you're saying no,  I believe in what this company does. I believe   in the thesis. There's nothing that's changed  in the thesis. This is just price volatility.   then yes it it then you can use those dips as the  opportunities to accumulate more and to position   yourself better. Yeah, I think that's a great  explanation and also disposition is so true.   It just depends on risk tolerance and so many  different different factors about what you prefer.   Um I hope that people are enjoying this ETF video.  if you are somebody who is more disposition for   ETF. Also, great argument, Chris, about ETFs just  take less of your time as an investor because you   don't have to do quite as much research. Um, it's  spread out more. So, I also think that these are   good time-saving options for investors, too. If  that's you and you like those, I want to remind   you about that ETF article that just came out on  Marketbeat. If you want to take a look at that   one, it's a very different thesis of different  kinds of ETFs to look at. scan the QR code or   get that link in the description to take a look at  that other ETF article on marketbeat.com. Again,   it's totally free for our viewers and just some  more information and ideas to look at for you.   And Chris, at the end of the day, that's what this  channel is all about is interesting stock ideas   for people to see what feels best for them and do  their own research and make their own decisions on   investing. And so, let's get on to that third  idea that you have for investors today is an   ETF to follow in the rare earth mineral sector.  This is the SPAT critical materials ETF. Ticker   symbol is SM. In a nutshell, here's what we're  talking about. Where the last ETF we talked about,   the ER narrowed in on rare earths specifically  and more towards those end use applications,   the SECTM has a broader exposure to a universe  of critical materials, not necessarily just rare   earths. For example, some of the largest companies  by weight in this ETF are uranium companies,   which we of course have talked about a lot on  this channel and will continue to talk a lot   about on this channel. Okay. Interesting. So, this  goes beyond some of those 17 critical me minerals   you're just talking about. It's probably talking  about. Let's take a look at the specific holdings   that are in this one and how many are in this one,  too. There are a lot more holdings. This fund has   held between 125 to 170 companies at any given  time. by far the most diversified of the three.   The total uh assets under management as of the  time we're taping this right now is around 541   million. That's something to think about. It's  also got an expense ratio of around 065%. Again,   that's larger than the two we've talked about. Um  it's it's getting a little bit heavier for some   investors. Some investors might not like that,  but it does track well with an ETF that's got   this broad and complex of a basket. Yeah. And also  so interesting to see that this one is broader. It   has so many more names than the last two. And  yet the chart looks very similar, especially   when you look at the one-year performance and  the three-month performance. It's right on par   with the other ones that we've been looking at.  Even fairly similar to just US as a sim as a as   a single stock. uh both up about 50 to 60% in the  last year and down about 20% in the last three   months. So that is interesting to see that even  though you have a broader uh more diversified ETF,   it's still performing fairly similarly. That goes  back to something we were talking about at the   beginning, the stocks just got ahead of the story.  Um there is a long-term story for why you want to   be invested in rare earth that's no different than  why you want to be invested in space. And it's   just I think you're seeing a very similar thing  happening in both sectors. The stocks got ahead   of themselves. They pulled back. Investors that  are looking to get in on the space and especially   if they're looking to get in in an ETF, now would  be a good time to consider getting in when it's   about that middle of the 52- week range. Yes, the  stocks may move a little bit lower, but the most   important thing right now is you're getting in and  you're getting in when it's not at the top. Yes.   And that is exactly the question that I wanted  to talk about a little bit more. And that is this   concept I've heard from plenty of investors of  once they've been burned by a stock or a sector,   uh they're hesitant to want to get in it again  or um are constantly questioning whether they   should just give up and sell the stock that they  bought that they're now down 20% on in the last   3 months. And they say, "Is it time to give up?  Should I get out of this stock now because uh I've   already been bleeding so much on this name?" And  that's a concept we've heard time and time again,   not just in rare earth, but in in so many  different sectors. We've heard that with quantum   at different times. We've even heard that in AI at  different times as things cycle down and then they   pop back up a couple of weeks later. And so, what  do you think about that concept of uh I'm ready to   give up on this one. Is it time to get out? That's  a hard one to answer, Bridget. And again, we don't   like to give personal advice, and I wouldn't  and I wouldn't give any investor personalized   investment advice on the channel, but what I would  say is this goes back to something I said earlier,   and that is I think it goes it speaks a lot to a  person's disposition when they're looking at these   stocks. Um, if you're looking at the space sector,  if you're looking at the rare earth sector,   these are these are sectors that are long-term  plays. the story is still being written and   sometimes yeah it's very tempting to get out of  these stocks even quantum to that you know to that   effect these are still very early stage companies  and you're going to get a lot of volatility   especially because in some cases institutions  aren't heavily involved and you know again you're   just going to see some volatility there my what  the best advice I could give and uh you know some   investors may not like it, some will, but it's the  idea of knowing what you own. And if you're not,   knowing what you own doesn't mean that you have  to be uh that you have to be an expert by vocation   or by just interest. I mean, you can learn  about space. you can learn about these things,   but if you if you simply just don't understand  a sector or you don't and you really don't want   to take the time to understand the sector, then  it's probably best that you're not in that sector.   There's plenty of other options and there's plenty  of other opportunities for investors. It's never   just going to be one sector that you can invest in  and and be profitable. And that's the whole thing.   If you know, if if mining stocks or rare earth  stocks are not a sector that really interests you   and you don't really think you're going to want  to learn about them, then it's probably best that   you stay away from them, even if there's, you  know, even if you're missing the potential for   those gains because there's other ways you can  easily make money in the market. Really great   information for everyone today, Chris. And if you  are an investor who likes to hear about different   sectors when they are on the downtrend and not  when they're at their new high, make sure to watch   this interview with our Jeffrey Neil Johnson where  he talks about the nuclear sector which is very   much down right now. He also talks about uranium  mining companies in there too. There are I think   a total of nine different stocks that he covers  in this video. You can watch that whole interview