Since 2026, the strategic importance of rare earths as a core resource has become increasingly prominent. Coupled with a persistently tight supply-demand balance in the industry, multiple positive catalysts have driven continuous momentum in the rare earth sector, making it one of the key focal themes in the A-share market. As the market's first exchange-traded fund (ETF) focused on the rare earth industry, the Rare Earth ETF (516780) saw net inflows for 9 out of the last 14 trading days, attracting a cumulative 773 million yuan. This has boosted the fund's shares and total assets to 1.792 billion units and 3.745 billion yuan, respectively.
From an industry perspective, policy controls and consolidation within the rare earth sector continue to deepen, establishing a rigid foundation for supply. As the dominant global supplier, China has strengthened overall production controls. In 2024, the growth rates for both rare earth mining and smelting separation in China slowed to 12.5% and 10.43%, respectively, indicating a deceleration in supply expansion. The implementation of a three-ministry regulatory measure in 2025 extends control across the entire domestic supply chain. By standardizing product traceability and raising industry entry barriers, these measures further tighten supply constraints, providing strong support for steady price increases in rare earths.
In industry developments, the 2026 Shanghai International Magnetic Materials and Application Industry Chain Exhibition (MMIC CHINA) is scheduled to take place from the 24th to the 26th of this month. This event serves as an important platform showcasing downstream applications of rare earth permanent magnet materials. As a key raw material for high-performance neodymium iron boron magnets, rare earths are essential components in sectors such as new energy vehicles, wind power, and robotics. The exhibition will highlight end-use applications of these materials, potentially renewing market focus on long-term demand within the rare earth industry chain.
The Rare Earth ETF (516780) and its feeder funds (Class A: 014331, Class C: 014332) closely track the CSI Rare Earth Industry Index, which includes companies involved in mining, processing, trading, and application across the industry chain. This makes the fund a potential tool for investors seeking exposure to growth opportunities in the rare earth sector. As of the latest data, the index's top five constituents are China Northern Rare Earth, Xiamen Tungsten, Goldwind Science & Technology, China Rare Earth, and Shenghe Resources, all of which are competitive leading enterprises within the industry.
According to the fund's mid-2025 report, the number of Rare Earth ETF (516780) holders reached 32,100 by June 30, 2025, making it the only rare earth-themed ETF in the market with over 20,000 holders at that time.
The fund manager, Huatai-PineBridge Fund, is one of China's first ETF managers and has long been committed to providing transparent, easily tradable, and low-cost index products. Two of its flagship ETFs—the Huatai-PineBridge CSI 300 ETF (510300) and the Huatai-PineBridge CSI 500 ETF (563360)—are highly popular, currently ranking as the largest in their respective categories. Their management fee and custody fee are set at 0.15% and 0.05% per annum, respectively, among the lowest tiers for equity index funds in the market.
Risk Warning: Funds carry risks; investors should exercise caution.
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