The Brazilian market now has an ETF (exchange-traded index fund) focused on rare earths and critical minerals, a group of inputs that has gained importance in the dispute between great powers for supply chains linked to the energy transition, defense and technology.
RARA11, from the investment manager Investo, began trading on the B3 primary market on June 26th. According to a statement from the exchange, trading on the secondary market begins this Monday (29).
ETF is an exchange-traded fund that allows the investor to buy, in a single share, exposure to a basket of assets or companies linked to a specific index, sector or theme.
According to material from Investo, the fund replicates REMX in Brazil, VanEck’s ETF traded on the New York Stock Exchange and domiciled in the United States. The product is referenced by the MVIS Global Rare Earth/Strategic Metals Index, an index that tracks global companies linked to rare earths and strategic metals.
In practice, the ETF allows Brazilian investors to purchase, through B3 and in reais, exposure to an international portfolio of companies in the sector. The composition includes companies from countries such as China, Australia, the United States, Canada and Chile.
Rare earths are a group of 17 elements used in technologies such as electric vehicle engines, wind turbines, medical equipment, electronics and defense systems. Despite their name, these minerals are not necessarily rare in nature. The main challenge lies in the ability to separate, refine and process materials on an industrial scale.
This bottleneck turned rare earths into a strategic topic for governments and companies. China concentrates most of the global separation and refining capacity for these elements, which has led the United States, the European Union, Australia and other countries to expand financing and support policies for alternative chains of critical minerals.
The Investo material states that RARA11 gives access to more than 30 companies specializing in rare earths and strategic metals. Among the largest positions are companies such as Albemarle, Pilbara Minerals, China Northern Rare Earth, MP Materials and Lynas Rare Earths.
In addition to rare earths, the index also includes minerals considered critical for the energy transition and sensitive industrial sectors, such as lithium, cobalt, titanium, molybdenum and tungsten.
The launch occurs at a time of greater attention in the financial market to assets linked to critical minerals. Demand for these inputs has been driven by electric vehicles, renewable energy, semiconductors, defense and energy storage technologies.
At the same time, the sector is marked by high volatility, dependence on political decisions and concentration of supply.
