Sprott Launches REXC: The First Ex-China Rare Earths ETF

On Wednesday, April 15, Sprott Asset Management expanded its lineup of exchange-traded funds with the debut of the Sprott Rare Earths Ex-China ETF (REXC). According to Sprott, REXC is the only ETF on the market that is offering a focus on rare earth companies outside China. 

Key Takeaways

• Sprott Asset Management has launched REXC, a new fund that provides distinct exposure to rare earth securities outside of China.
• Crucially, REXC is the only fund on the market that offers focused exposure on ex-China rare earth companies.
• There is momentum in the United States to enhance domestic production, supply chains, and reserves for rare earths. Gaining ex-China rare earths exposure could make a great deal of sense for the long term.

“Rare earths sit at the intersection of national security, energy security and technological leadership,” added Steve Schoffstall, Managing Partner and Head of ETFs at Sprott. “As governments in developed countries accelerate efforts to secure non-China supply chains, we believe companies operating outside China across the rare earths value chain are strategically positioned. REXC offers investors a targeted way to access that opportunity through a pure-play ETF.”

REXC will deliver exposure to companies engaged in the rare earths industry outside of China. Additionally, the fund has a net expense ratio of 65 basis points. 

REXC looks to generate similar results to that of the Nasdaq Sprott Rare Earths Ex-China Index. The index looks at companies engaged in producing, refining, mining, and separating rate earth materials across the globe, save for those primarily operating or domiciled in China. 

The Advantages of Ex-China Rare Earths Exposure

Rare earths are a critical material utilized in a multitude of different industries. This includes artificial intelligence, energy infrastructure, defense, semiconductors, and many more. Consequently, broad demand for these materials is likely not going to abate any time soon.

China holds a dominant position in the rare earths industry. However, gaining exposure to companies outside the country can make a great deal of sense right now. The U.S. is in the midst of strengthening its domestic production and supply chains, along with a $12 billion critical minerals reserve. Therefore, advisors and investors have an opportunity to get in on ex-China rare earths as momentum begins to grow in the space. 

“Sprott has established an ETF leadership position for advisors seeking critical materials exposure,” noted Todd Rosenbluth, Head of Research at Vettafi. “It is great to see them expand their lineup and continue to innovate.”

REXC comes online leveraging Sprott’s impressive experience in navigating the field of critical materials and precious metals. For example, one of Sprott’s most popular funds, the Sprott Uranium Miners ETF (URNM), has over $2.2 billion in assets under management.