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Wednesday, June 15, 2011

Rare Earth Metals: China's Gold Rush

Rare Earth Metals are an area of increased attention in the investment world in the last 6 months. China has a majority of the world's rare earths, which could result in a significant advantage in the coming years.  From an investment perspective, the easiest and most efficient way of getting access to this sector is through foreign and domestic equity securities of publicly traded companies primarily engaged in a variety of activities that are related to the producing, refining and recycling of rare earth and strategic metals and minerals.

The ETF that we like is ticker symbol: REMX. REMX (which is a ETF offered by  Market Vectors) includes 
small, medium and micro-capitalization companies. Rare earth/strategic metals are industrial metals that are typically mined as byproducts or secondary metals in operations focused on precious metals and base metals. Approximately 49 elements in the periodic table are considered rare earth/strategic metal.

We feel that an allocation to Rare Earths as a part of your overall commodity allocation over the long term will be a positive for investors.

*At the time of writing, we have long positions in REMX*

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