Bloggers Battle Rare Earths Miner
As the world’s voracious appetite for all things commodity continues to grow, it is perhaps no surprise to see frequent backlash from the public, particularly eco-conscious groups. In recent months, Sydney-based mining firm Lynas (LYC.AU) has fallen under the media spotlight as an unlikely opponent managed to gather enough support to disrupt the company’s plans to expand its operations. With the support of Twitter, Facebook and the good ol’ world wide web, retired math teacher Tan Bun Teet and his “Save Malaysia, Stop Lynas” campaigners have drawn nationwide support through an internet-based campaign to challenge the environmental impact of the rare earths mining company’s refinery plans [for more rare earths news and analysis subscribe to our free newsletter].
Rare Earths Get Run Over
For commodity investors looking to diversify their holdings, rare earth/strategic metals have presented several potentially lucrative opportunities over the years. As such, many have shifted their assets to this niche segment, causing a tremendous influx of investments from around the globe. But, of course, following the logic of simple economics, the overflow of investments combined with a significant supply gut has put considerable pressure on the players in this once-hot corner of the commodity market [for more rare earth/strategic metal news and analysis subscribe to our free newsletter].
REMX In Depth: The Five Minute Guide To The Rare Earth Metal ETF
While key commodities such as corn, gold, and copper often dominate the spotlight, a group of metals known as ‘rare earths’ have a reputation of truly shining through with amazing returns. In fact, some of the top metals in the group, such as Neodymium, Dysprosium, Yttrium, and Erbium, put up gains in the past that would make metals such as silver or gold’s historic performances in 2011 look down-right bearish. For example, of the four rare earths outlined above, the worst performer in 2011 had a gain of ‘just’ 50% while several saw their prices surge by over 200% in year-to-date terms. Returns in 2012 have not matched these amazing standards set by the previous year, but that doesn’t mean this market will not surge again [for more rare earth metals news and analysis subscribe to our free newsletter].
5 Highest-Yielding Commodity ETFs
Earning income from commodity investments typically requires some work and creativity on the part of investors. After all, gold bars and barrels of oil don’t pay out any income in and of themselves. That means that investors who want yield from their commodity investments need to either periodically sell part of their position to replicate income, or they need to invest in shares of commodity-related companies that do pay dividends.
How to Build a Futures Free Commodity Portfolio
For commodity traders, futures contracts and futures-based products are usually the go-to financial instruments for gaining exposure to your favorite hard assets. While futures investing may be appealing, there are many serious drawbacks and costly nuances to this strategy that can impact bottom-line returns. And without fully understanding how futures work and without being able to frequently monitor a trade, futures positions can quickly turn sour. For those who wish to avoid futures, we outline an all ETF portfolio that is designed to provide well-rounded exposure across all of the major commodities completely devoid of these contracts [for more commodity news and analysis subscribe to our free newsletter].
The Highest Yielding Commodity ETF Is…
Today’s investing environment has led many investors to search for strong dividend yields. With near zero interest rates and an uncertain debt market, turning to dividends has become one of the most popular strategies to grace an investors portfolio since the recession began. For commodity investors the search was quite difficult; many commodity investors stick primarily to futures contracts or futures-based assets like the United States Natural Gas Fund (UNG) among others. But for those who look closely enough, there are some enticing yields in the space [see also 12 High-Yielding Commodities For 2012].
Kings Of Commodity Dividends: ETF Style
Income investors often feel that commodities are not sound investments for their portfolio as something like a futures contract on gold offers no yield. But there are plenty of other ways to make a play on commodities while adding the safety net of dividend yield. Some turn to stocks while others are more partial to the security that index funds offer, namely, exchange traded products. ETFs offer investors immediate diversification through a single ticker while holding onto added benefits of intraday liquidity, transparency, and some favorable tax treatments. A number of ETFs that choose to focus on commodities come with handsome yields attached. Below, we outline the highest yielding commodity products [see also 12 High-Yielding Commodities For 2012].
A Closer Look At The Rare Earth Metal ETF (REMX)
2011 has been a pretty good year for commodities overall as a weakened dollar, supply concerns, and strong growth in emerging markets, have combined to keep many products in high demand. While key commodities such as corn, gold, and copper often dominate the spotlight, a group of metals known as ‘rare earths’ have truly been the star performers so far this year. In fact, some of the top metals in the group, such as Neodymium, Dysprosium, Yttrium, and Erbium, have put up gains that would make metals such as silver or gold’s performances in 2011 look down-right bearish. For example, of the four rare earths outlined above, the worst performer has put up a gain of ‘just’ 50% while several have seen their prices surge by over 200% in year-to-date terms, suggesting to many investors that a bull market is alive and well in some commodities despite the global economic malaise.
