Some rules are made to be broken. Much earlier in my investing career, I had a rule about what I was willing to invest in… and what I wasn’t. In the latter category, I included the mantra “do not buy anything politically charged.”
Fast forward to 2026, and that rule is deep in the trash can. Because these days, everything has political overtones.
The good news is that now I am able to look at ETFs like the Vaneck Rare Earth Strategic Metals ETF (REMX) with eyes wide open. This fund is incredibly important in 2026 as it has strong ties to both the U.S. and China.
Here’s some analytics on REMX, followed by the political overtones. Starting with this chart below. It shows REMX, which invests in rare earth metals. It spiked higher in recent months, and more so than what I see in other metals like silver, it looks like a candidate to catapult higher. Just in time for President Donald Trump’s meeting in China later this month.
A chart like that is a double-edged sword, since it has had such a big move already. As they say, “trees don’t grow to the sky.” Especially since the 17 rare earth elements, named as such because they are so hard to extract, do not grow on trees at all. They grow in the ground. And to a large extent (more than 85%), they grow in China.
So it is not an overstatement to say that what REMX invests in – stocks of companies involved in rare earth materials extraction, refining, and recycling – China has what the U.S. needs. Because they are key inputs for building AI technology. That makes REMX a political football.
In my proprietary ROAR system, REMX currently has a score of 40. It would be higher, except that ROAR is systematically built to punish stocks and ETFs immediately after they surge higher in price. See the “trees” and “sky” reference above.
REMX has a fighting chance to go higher still, since it has already checked back hard. It followed up its year-end in 2025 by declining nearly 20%, very quickly. That “pause that refreshes” helps reset the technicals, and makes REMX a stronger candidate to push to new highs. But the ROAR Score of 40 reminds us that while that next wave higher is quite possible, it is still considered more of a “neutral risk” situation. If the ROAR Score were 70 or higher, it would be in the green zone, implying lower risk for the return potential offered.
Why Is the REMX ETF Going Up?
This sudden momentum is being driven by a historic price spike in critical minerals outside of China, where elements like dysprosium have seen year-to-date increases exceeding 100%. The market is currently grappling with a bifurcated pricing structure, where Western market prices for key magnets and minerals are trading at premiums of 60% to 400 percent% above Chinese domestic rates.
The bull case for REMX is centered on the weaponization of supply chains and the resulting geopolitical tailwinds. China currently controls roughly 60% of global rare earth production and 90% of refining capacity. In late 2025, Beijing introduced aggressive export controls that require foreign firms to obtain government approval for any products containing even trace amounts of Chinese-sourced minerals.
The bear case focuses on the extreme volatility and concentration risks inherent in this specialized sector. A significant portion of the fund is actually allocated to lithium and strategic metals rather than pure-play rare earths, which ties its performance closely to the fluctuating demand for electric vehicle batteries. And, while mining is diversifying, the midstream processing and refining stages remain heavily concentrated in China.
Establishing alternative refining clusters is a capital-intensive process that can take years, meaning any sudden de-escalation in trade tensions or a global economic slowdown could lead to a rapid collapse in the current price premiums.
REMX is likely to continue on as a rival player in the minds of traders and investors focused on the commodities space. Silver, gold, and copper are the old standbys. But here, the volatility, the intrigue based on what the U.S. needs and what China dominates in, and the fact that politics and investing can no longer be separated, makes this ETF one I’m watching for regular trading work.
Rob Isbitts created the ROAR Score, based on his 40+ years of technical analysis experience. ROAR helps DIY investors manage risk and create their own portfolios. For Rob's written research, check out ETFYourself.com.
On the date of publication, Rob Isbitts did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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