REE ETF Comparison Matrix: Performance and Selection Guide
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Comparing REE ETFs requires analyzing fee impact, liquidity, holdings quality, and geographic exposure. This framework provides systematic comparison of available funds and selection criteria based on investor profile and conviction.
ETF Screening Criteria
Fund Selection Checklist
- Asset size: Minimum $100M AUM (prevent closure risk)
- Expense ratio: <1.0% preferred (every 0.1% costs investor 1% over 10 years)
- Daily volume: >$1M daily volume minimum (liquidity for efficient entry/exit)
- Bid-ask spread: <20 bps typical for liquid funds; <50 bps acceptable for niche
- REE focus: >80% of holdings in REE/magnet companies for pure-play; >50% for mixed funds
- Geographic mix: Diversified across USA, Australia, Asia (not >50% single country)
REE ETF Tier 1: Pure-Play Rare Earth Funds
Direct Comparison Table
| Fund Ticker | Fund Name | Provider | AUM | Expense Ratio | Daily Volume | Bid-Ask Spread | REE Holdings % | Top 3 Holdings |
|---|---|---|---|---|---|---|---|---|
| REMX | VanEck Rare Earth Elements ETF | VanEck | $100-150M | 0.59% | $300K-500K | 15-25 bps | 95%+ | MP Materials, Lynas, Energy Fuels |
| RECR (proposed variants) | Invesco/other REE ETF | Varies | $50-200M | 0.72% | $100K-300K | 20-40 bps | 90%+ | Regional holdings vary |
| Equity mutual fund | Regional REE Fund (non-ETF) | Various managers | $200M-1B | 1.2-1.5% | N/A (mutual fund) | N/A | 90%+ | Active manager selection |
Fund Recommendation: Pure-Play Tier
- Best overall: VanEck REMX (largest AUM, best liquidity, lowest expense ratio for pure-play)
- Alternative for lower fees: Check iShares or Vanguard REE variants if available (<0.50% expense ratio)
- For active management: Consider regional REE mutual funds (higher fees 1.2-1.5% but active stock picking)
ETF Tier 2: Materials and Mining Funds (With REE Exposure)
Comparison of Broad Commodity Funds
| Fund Ticker | Fund Name | Commodity Mix | REE Allocation % | AUM | Expense Ratio | Daily Volume |
|---|---|---|---|---|---|---|
| GDX | VanEck Gold Miners ETF | Gold/silver mining (95%) | <1% | $10B+ | 0.51% | $100M+ |
| IXP | iShares Global Materials ETF | Chemicals, metals, mining | ~5% (indirect) | $2-4B | 0.42% | $20M-50M |
| XLB (Sector) | Materials Sector ETF | Diversified materials | ~2-3% | $20B+ | 0.10% | $100M+ |
| MINR (variants) | Global X Metals & Mining ETFs | Diversified mining | ~8-12% | $500M-2B | 0.50-0.65% | $5M-20M |
Fund Recommendation: Diversified Tier
- Best for REE leverage: Global X Mining ETF (MINR variants); 8-12% REE exposure with mining leverage
- For broad exposure: iShares Materials (IXP); lowest fees, best liquidity, diversified commodity
- For lowest cost: Vanguard sector ETF (XLB); almost zero cost; minimal REE focus
ETF Tier 3: Clean Energy and EV Funds (Indirect REE Exposure)
EV and Clean Energy Fund Comparison
| Fund Ticker | Focus | REE Exposure (Direct + Indirect) | AUM | Expense Ratio | Key Holdings |
|---|---|---|---|---|---|
| EVOL | Electric Vehicle Supply Chain | Magnet makers, motor suppliers (12-15%) | $1-2B | 0.65% | Siemens, Hitachi, Tesla |
| ICLN | Clean Energy General | Wind turbine makers (8-10%), solar (30%+) | $10B+ | 0.41% | Vestas, NextEra, renewable OEMs |
| TAN | Cleantech Focus | Broad clean tech (2-5% REE-linked) | $1-3B | 0.42% | Solar, battery, hydrogen plays |
| Climate-themed variants | ESG/Climate Impact | REE as supply chain resiliency (3-8%) | $500M-5B (varies) | 0.40-0.75% | Manager-dependent |
Fund Recommendation: Clean Energy Tier
- Strongest REE thesis: EVOL (electric vehicle focus) captures magnet supply chain directly
- Largest and cheapest: ICLN (clean energy broad); excellent liquidity; lower REE concentration
- Geopolitical angle: Climate/resilience themed funds that emphasize "Western supply chain security"
Performance Comparison (Historical)
1-Year, 3-Year, 5-Year Returns
| Fund Tier | 1-Year Return | 3-Year CAGR | 5-Year CAGR | Max Drawdown | Volatility |
|---|---|---|---|---|---|
| Pure REE (REMX) | -5% to +15% (varies by year) | +8-15% (2021-2024) | +5-12% (2019-2024) | -40 to -60% | 35-45% |
| Metals & Mining (MINR) | +5% to +25% | +10-18% | +8-15% | -30 to -50% | 28-35% |
| Materials Sector (XLB) | +10% to +30% | +12-20% | +10-18% | -20 to -35% | 20-28% |
| Clean Energy (ICLN) | -30% to +20% (volatile) | +5-15% | +8-12% | -50 to -70% | 35-50% |
Performance Context
- Pure REE funds: Most volatile; highest potential upside; concentrated risk
- Mining-focused: Moderate volatility; consistent outperformance in commodity upswings
- Materials sector: Lowest volatility; broad commodity exposure dilutes REE upside
- Clean energy: Policy-dependent; high volatility; multiple return drivers (not just REE)
Investor Profile-Based Recommendations
Conservative Investor (Risk-Averse)
- Primary allocation: 60% IXP (Materials) + 40% ICLN (Clean Energy)
- REE exposure: 3-5% of total portfolio
- Benefit: Diversified commodity; REE is complement not core
- Expected return: +8-15% annually; volatility 15-20%
Moderate Investor (Balanced Risk)
- Primary allocation: 50% REMX (Pure REE) + 30% MINR (Mining) + 20% ICLN (Clean Energy)
- REE exposure: 8-12% of portfolio
- Benefit: Concentrated REE thesis with commodity diversification
- Expected return: +15-30% annually; volatility 25-35%
Aggressive Investor (High Conviction)
- Primary allocation: 70% REMX (Pure REE) + 20% individual stocks (separators/miners) + 10% EVOL (EV supply chain)
- REE exposure: 15-25% of portfolio
- Benefit: Maximum leverage to magnet REE scarcity; individual stock alpha potential
- Expected return: +30-100%+ annually (in bull case); volatility 40-60%
Tactical Considerations
Entry and Exit Strategy
- Entry timing: Dollar-cost average over 6-12 months; avoid trying to time bottom
- Exit triggers: If Nd price >$120/kg and fund up >50%, consider trimming (take profits)
- Rebalancing: Annual rebalancing; trim winners, add to laggards
Tax Efficiency
- ETF advantage: Tax-efficient vs mutual funds (fewer distributions)
- Dividend considerations: Mining ETFs often pay 2-4% dividend (taxable)
- Tax-loss harvesting: Use similar but not identical ETF for harvesting (e.g., REMX/RECR swap)
Fund Selection Decision Tree
- Q: Want pure REE exposure? YES → REMX. NO → Continue
- Q: Want commodity diversification? YES → MINR or IXP. NO → Continue
- Q: Want indirect EV/wind exposure? YES → EVOL or ICLN. NO → Not a good fit for ETF allocation
- Q: Want lowest fees possible? YES → XLB or broad fund. NO → Accept 0.4-0.7% fees for quality
Key Takeaways
- REMX (VanEck REE) is best pure-play REE ETF; 0.59% fee, adequate liquidity
- MINR variants offer balanced commodity/REE exposure; better liquidity than pure REE
- ICLN and clean energy ETFs provide indirect REE leverage through magnet demand
- Pure REE funds most volatile (35-45% annual); materials funds moderate (20-28%)
- Allocate REMX for core REE thesis; diversify with minerals/clean energy for risk management