The first ETF on rare earth like scandium will start

Rare earth are in high-tech companies in hot demand. Mobile phones, flat screen televisions and hybrid cars. Nothing works without yttrium, lanthanum or ytterbium. Now there is the first ETF from UBS on the Stoxx-Rare-Earth-Index
The boom in the products on REE has already provided some time ago at the party certificates for gold rush. But since then the prices are in free fall, they have disappeared from the radar screen of most investors. Now try the Swiss UBS ETF investors again with the first warming to the subject. In contrast to some limited term certificate refers to the ETF launched in July on the Rare Earth Stoxx index. It consists of 14 titles that achieve at least 30 percent of its sales from the mining and processing of rare earth minerals - 17 of them there. It is scandium, yttrium, lanthanum, lutetium, ytterbium, thulium, erbium, holmium, dysprosium, terbium, gadolinium,
Europium, samarium, promethium, neodymium, praseodymium, and cerium.

Another selection criterion for the Index is liquidity. Only stocks whose trading volume of at least one million dollars per day is - over a period
three months - come into question. In addition, the weight of a single value to a maximum of 20 percent is limited, and is rebalanced every three months the index. The 20-percent mark for the U.S. companies are currently achieving Lynas Corporation and the Australian value of Molycorp. Through the few titles available for selection, the concentration is very high. The five largest stocks make clear already from more than 65 percent. The regional variation is quite small. Canadian companies account for nearly 42 percent, more than 33 percent of Australian, U.S. and Chinese five values ​​20 percent.



The rare earth are so popular because they are considered "mobility fuel". Because modern technology can not do without it. LED lamps, solar panels, mobile phones, flat screens, and not least electric and hybrid cars are unthinkable without them. Therefore, the companies are very promising as a long term. But even in the short term could benefit values. End of October, almost all Chinese enterprises stopped production to stem the price decline. This should succeed, since over 90 percent of the rare earth metals in the Middle Kingdom are encouraged.

Rare earths are interesting. The ETF is but little diversified. Therefore it is suitable only for investors willing to take risks.