Investing in funds of the rare earths

UBSRare earth (English. Rare Earth) are not an integral part of our everyday lives. Can be found in high-tech products as well as use in the automotive industry, with wind turbines and photovoltaic. The materials have unusual properties. With europium, for example, the red dye in the LCD panel produces. Neodymium enables the production of large permanent magnet, which are installed in wind turbines. Experts estimate the global turnover of the industries dependent on these metals to annually 3,4 Billion €. That's five percent of global gross domestic product.

In recent years, rare earth elements were increasingly used in industry. Already, the demand is partly funded by the world market supply. Experts believe, that the demand will increase in future. Reasons for this is still the growing importance of alternative energy and new transport technologies. To 2015 growth in demand for rare earths per year 124 000 Tons (2009) to more than 200.000 Tons increase. Already in the past decade it has tripled. This leads to shortages and significant price increases.

So far there are few investment opportunities in rare earths. Unlike other commodities, the metals are not publicly traded and therefore there is no standardized futures. In the medium term consequently are not physically stored financial products is expected to. Also on the futures market are not investments. The easiest way for investors is to participate in mining companies. The growing interest of investors, UBS UBS carries with her STOXX Global Rare Earth ETF, the first ETF in Europe in the sector, "Rare Earth", Account. The ETF mirrors the performance of companies outside of China again, at least 30% with rare earths earn their income. The exchange-traded index fund is passively managed index-tracking and earned a return.


The ETF tracks the barometer to the physical replication method. This dispenses with the explicit use of swaps to index sampling. UBS ETFs investing in stocks generally, contained in the index. They seek a full index replication. This means, that the ETF holds all index stocks, and the weighting of the ETF weighting in the index corresponds to the title. The decision, whether a company is included in the index, meets the index provider - in this case STOXX Ltd.. To be included in the index STOXX Global Rare Earth, must meet certain requirements, the individual title. This is the index provider STOXX formulated a transparent set of rules.

A risk-averse investor therefore has an additional resource module, flexibility to invest in the performance of companies outside of China, to generate income with rare earths. The UBS ETFs are broadly diversified and offer the typical advantages of ETFs as an efficient and cost effective market access, simple and liquid stock market trading and improved transparency. UBS ETF on the STOXX Global Rare Earth Index is a UCITS IV-compliant index funds, the Luxembourg law is set up. For the portfolio management of the ETFs is UBS Global Asset Management is responsible and fund administration is handled by the State Street Bank in Luxembourg. This ETF is offered in two classes, open to all investors. The Class "A" is intended for retail customers, the Class "I" takes care of the needs of institutional investors and high net worth private clients.

The most important companies in the index
STOXX Global Rare Earth Index is currently composed 13 Companies together. With almost 19% is the Australian company Lynas Corporation Ltd.. the most represented. The mining company is specialized in the exploration and processing of rare earth minerals that. Lynas's strategy, a safe and reliable source of supply directly from the mine to ensure the customer (Branding Rare Earth Direct). So the company wants to move up to a global perspective, the biggest producer and supplier of rare earth. Its main mine, Mount Weld, located in Western Australia.

The only American company and second largest in the index is Molycorp Incorporation, based in Greenwood Village, Colorado. Her story begins shortly after the 2. World war, as were found in Mountain Pass Bastnäsite. Still today, this mine is considered to be their main source of income. Molycorp has also subcontracted the Molycorp Silmet in Estonia, a producer of rare earth oxides and rare metals. In 2011 took over the company also Santoku America Inc, a manufacturer of specialty metals and alloys. Molycorp is the only producer of rare earth oxides in the Western Hemisphere.
Neo Materials Technologies Inc is a Canadian company based in Toronto. The origin of the company to the year 1993 back, as they came in two Chinese joint ventures and earned in this way shares in two existing plants for rare earths. In 1997 They created a system in Thailand for the production of "neo Powder», a magnetic powder, which is made from a neodymium-iron-boron alloy. Neo Materials Technologies has a total of 19 Investments in 10 different countries.

The main source of Avalon Rare Metals Inc. is the Rare Earth Element Deposit Nachalacho mine, to which 100 Percent of the company belongs. It is believed, that exist in this area a deposit of rare earths in high quality. Four other plants in Canada are currently in preparation, of which there are three in an advanced stage.
Alkanes Resources is a mining company in Australia, which operates in addition to the extraction of rare earths in the gold mining. Most recently the company has discovered in the Tomingley Gold Project and new highly concentrated near the surface gold deposits.

More information can be found on www.ubs.com/etf

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