When Washington, D.C. imposed tariffs, China threatened to limit access to rare-earth metals, highlighting their importance. The VanEck Rare Earth and Strategic Metals ETF surged on Wall Street. These metals are crucial for technology and defense, with access vital for military strategies. The U.S. government invested in MP Materials, emphasizing their significance.

The VanEck Rare Earth and Strategic Metals ETF tracks the MVIS Global Rare Earth/Strategic Metals index, focusing on companies involved in rare-earth production. It includes metals like lithium and lanthanum used in technology. The ETF’s diversified portfolio of 30 stocks offers exposure to this specialized market niche, but comes with a 0.58% expense ratio.

Investing in rare-earth and strategic metals carries price volatility risks, impacting stock performance. The VanEck ETF, though providing diversified exposure, has underperformed due to commodity price fluctuations. Long-term investors may prefer a simple portfolio over specialized market niches like this ETF.

Consider the risk-reward profile before investing in the VanEck Rare Earth and Strategic Metals ETF. Historical performance shows that a simple S&P 500 index ETF may yield better results. The ETF’s expense ratio is 0.58%, making it relatively expensive compared to other ETFs.

The Motley Fool Stock Advisor team did not include the VanEck ETF Trust – VanEck Rare Earth And Strategic Metals ETF in their top 10 stocks. Historical data shows their picks outperformed the market significantly. Investors may want to analyze the potential returns of the ETF and consider other investment options for better long-term growth.

Read more at Yahoo Finance: Is VanEck Rare Earth and Strategic Metals ETF the Smartest Investment You Can Make Today?