Investment Destination Amid US-China Rare Earth Dispute: PLUS Global Rare Earth & Strategic Resource Producers ETF

On October 16, Hanwha Asset Management introduced the "PLUS Global Rare Earth & Strategic Resource Producers" exchange-traded fund (ETF) as the only domestic investment vehicle benefiting from the ongoing mineral war between the United States and China.

The PLUS Global Rare Earth & Strategic Resource Producers ETF is comprised of leading global companies engaged in the production, refining, and recycling of rare earth elements and strategic resources. In the domestic ETF market, this is the only product that allows investors to access companies related to rare earth elements and strategic resources.

Key holdings include rare earth mining companies such as MP Materials (United States), Northern Rare Earth (China), and Lynas (Australia), as well as lithium mining companies like Albemarle (United States), Pilbara Minerals (Australia), Sociedad Quimica y Minera de Chile (Chile), and Liontown Resources (Australia).

The PLUS Global Rare Earth & Strategic Resource Producers ETF has recently demonstrated a steep increase in returns. As of October 14, its returns were 28.2% over the past week, 48.9% over the past month, 82.6% over the past three months, and 100.4% since the beginning of the year.

This performance is attributed to the intensifying power struggle between the United States and China over critical minerals. In response to the United States imposing high tariffs and semiconductor export controls, China has played its "rare earth export control" card. Rare earth elements, for which China effectively controls the supply chain, are essential materials for manufacturing key components in high-performance equipment such as AI servers, data centers, GPUs, and sensors. They are also indispensable resources for eco-friendly and advanced industries like smartphones, electric vehicle motors, and wind turbines, as well as for core defense industry equipment such as radars, military sensors, and missile guidance systems.

The U.S. government has directly invested in MP Materials, the largest rare earth mining company in the United States, and has taken measures such as guaranteeing a price floor for its products. As a result, MP Materials, which had been suffering from price competition with China, is expected to see significant improvement in its operating profit.

On October 7, U.S. President Donald Trump signed an executive order allowing the development of key minerals that had been restricted by environmental regulations. This move aims to reduce dependency on China and secure domestic supply chains in response to China's weaponization of strategic resources.

Lithium prices, a key raw material for electric vehicles and energy storage systems (ESS), have also impacted performance. Recently, news of lithium production cuts in China has led to a rebound in lithium prices, which in turn has driven up the stock prices of related mining companies. Hanwha Asset Management explained that rising mineral prices can lead to improved operating profits for producers.

Choi Youngjin, Chief Marketing Officer of Hanwha Asset Management, stated, "The PLUS Global Rare Earth & Strategic Resource Producers ETF is an appropriate investment alternative for those seeking exposure to the challenging field of resource investment," adding, "With the United States recently signing an executive order permitting domestic mineral development, this ETF is an investment vehicle that can directly benefit from such policy measures."

He further added, "Since rare earth elements and strategic resources are indispensable materials for advanced industries such as semiconductors, electric vehicles, and AI, which will be major growth drivers in the future, it is necessary to approach this investment from a long-term perspective."