Fun With Rare Earths | ETF Trends

Rare Earths have captured the market’s imagination lately. Jet fighters, submarines, cell phones, EV’s, wind turbines, humanoid robots. The products they are used in range from the mundane (washer/dryers, vacuum cleaners, electric toothbrushes) to the exciting and enabling for high tech as listed above. It is well known that China has daunting shares of the mining, processing/separation and magnets/components industries that bring these elements and minerals to their end markets. There aren’t many publicly traded companies in the world that participate in these industries, and even fewer in the US. And they are typically very small and only capture a small piece of the value chain.

What do you get when small supply meets large demand? Increased prices, of course. For example (and to be clear, Globalt is not recommending any of these stocks or ETFs), the stock prices of MP Materials (MP), Lynas Rare Earths Limited Sponsored ADR (LYSDY), and USA Rare Earth (USAR) are up 234%, 106%, and 18%, respectively, year-to-date through December 17. Exchange Traded Funds VanEck Rare Earth/Strategic Metals (REMX) and Sprott Critical Materials (SETM) are up 84% and 85%, respectively.

What is something that is “critical” worth? That depends on what you mean by “critical,” of course. What comes to mind is life or death. Life if you have them, death if you don’t, which is not quite the case with Rare Earths. What they really provide is competitive advantage, which translates into life or death over the longer term. Better, stronger, faster, lighter, more efficient components and products. High power, sensitivity, and resilience in harsh environments. The most important product is permanent magnets. Better products on the civilian side, and on the military side, products critical to sustaining technological superiority, or “overmatch,” (quieter, higher-resolution, more precise). So, criticalness does potentially add to the value. But if you are worried, as our government appears to be, about not having enough and losing the “overmatch” battle, the important thing to know is that the amount that goes into military applications is trivial compared to the civilian market and can be satisfied by non-China production.

Rare Earth Elements (REE’s) aren’t rare, but they aren’t easy. There are plenty of these elements in the earth’s crust. What is rare is the amount of them we use, which is not very much at all. The Wall Street firm Bernstein recently estimated that the total size of the market by revenue for the top 20 twenty REEs (after which the numbers are negligible) is $15 billion, smaller than the market cap of Best Buy. Couple that with the capital intensity, time to set up facilities, and complexity of processing them, and the incentive to invest is very low in a free, non-subsidized market. Thus, why China has the overwhelming market share.

Putting this all together, we believe investing in this market for the typical investor is likely to involve a great deal of volatility and we prefer to be on the sidelines right now.

The five REEs named as critical by the US Government are listed below from biggest market size to smallest. We note that they all have funny names because they were named all at once by a small group of nerdy European chemists with a strange sense of humor:

Neodymium —Permanent magnets. This is the most important REE.

Dysprosium—Permanent magnets, lighting, lasers, nuclear reactors

Praseodymium—Super-strong magnets, metal alloys, specialty glass, lasers.

Cerium—Flat panel displays, automobile catalytic converters.

Lanthanum—Optical glass, nickel-metal-hydride batteries.

Where’s the fun part you may well be asking yourself? Well, here it is. We compiled our own list of some of the Lesser Known Rare Earth Elements (LKREEs) and are sharing with you below:

FOMCeemium—Originally mined only in Washington DC (although a new mine was opened in 1991 in Fort Worth, Texas) this rare earth is the never-talked-about secret ingredient used in the manufacture of all US paper currency and coins. It has several powerful properties including the ability to multiply itself though being able to defy the physical world by having the same dollar being in several places at one time. All members of the Federal reserve are given a limited supply during their tenure that allows them to speak an incomprehensible language known only to themselves, and the confidence to make decisions that affect everybody’s lives even though they don’t actually know what those effects will be.

LLMysterium—Recently discovered in Silicon Valley, the newest of the LKREEs is the secret material found in super-amazing computer processing chips named after scientists who were prominent in working on super-amazing scientific concepts such as dark matter and quantum electrodynamics. The more you have of this material, the better it works at its main function, which is to devour all the other resources of the planet though convincing humans that it is super-intelligent and that if they can control it, they can finally be super-human. Sometimes referred to as the Galactus element.

PutinXiDraxZorinium—Prior to the discovery of LLMysterium, this mineral was considered critical to world domination. Mined mostly in Irkutsk, Yakutsk and Outer Mongolia, in-the-know leaders have used its ability to instill fear and loyalty in their subjects for centuries. There has been a brisk trade to banana republics throughout the world, although it has occasionally been obtained in trace amounts by certain cult-of-personality and entertainment leaders.

YutuubTktokigrammium—This element’s existence is still a matter of speculation and has not yet been confirmed scientifically. It is believed to be the lightest of the elements with an atomic weight significantly below that of hydrogen. It appears to be everywhere but cannot be pinpointed, and seems to be implicated in inducing a state, in otherwise normal young adults, that everyone on the planet can’t live without knowing, though video, what they are doing, what their opinions are about everything and anything but particularly cosmetics, gadgets, performance enhancing supplements, cozy all-purpose blankets, and everything their pets are doing that is sooo cute.

Congressesium—When the United States Capital building was built, no one had any idea that it was being built on top of a thick deposit of this mineral that stretches for miles around and below Capitol Hill. Although its concentration is less than 1 part per gazillion (PPG), it is extremely potent, and elected officials exposed to it over time are compelled to talk verbosely at length, lose connection with common sense, have an inability to agree on anything of substance, and feel it is perfectly alright to exempt themselves from any legislation they pass.

Santamonium—This element is found only at the North Pole and is used in the bio-nano-circuitry embedded in reindeer (and Santa Clause himself) that enables time-travel and the ability to change size at will. When dispersed into the upper atmosphere of planet earth (starting the day after Thanksgiving) it also has the effect of fomenting the populace to be full of goodwill, cheer, generosity and the urge for over the top glitzy decorating.

Happy Holidays to Everyone!

By Thomas Martin, CFA

Originally published December 23, 2025

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