Share-split context: A reverse split was recorded on Apr 15, 2020 with coefficient 0.333333. A reverse split combines multiple old shares into fewer new shares and mechanically raises the quoted price per share. That mechanical increase does not restore lost investment value. The returns in this report are already split-adjusted, while reverse-split history remains a separate structural warning.

ETF Education Report: VanEck Rare Earth and Strategic Metals ETF (REMX)

What this ETF is trying to do

The VanEck Rare Earth and Strategic Metals ETF (REMX) focuses on companies involved in rare earth and strategic metals. This includes a variety of mining and materials companies. Because this ETF has a history of reverse splits, we look at "split-adjusted" returns to understand its true performance. A reverse split is when multiple old shares are combined into fewer new shares, which causes the price per share to rise mechanically.

What the numbers show

It is important to understand the difference between price return and total return. Price return only tracks how much the share price moves. Total return includes both price changes and any distributions (cash payments) made to investors.

• Year-to-Date (YTD): The YTD price return is approximately -16.29%. The YTD total return is also approximately -16.29%.

• One-Year: The one-year price return is approximately -16.09%. However, the one-year total return is approximately -14.63%.

• Three-Year: The three-year price return is approximately -1.24%. The three-year total return is approximately 3.00%.

• Five-Year: The five-year total return is approximately -33.68%.

Income and distribution explanation

This ETF provides a distribution yield of approximately 2.10%. This represents the cash distributions relative to the ETF price. The trailing distributions over the last year were approximately $1.30 per share. Distributions for this ETF are described as irregular or less frequent, with only one payout recorded in the last 12 months.

NAV erosion explanation

"NAV erosion" refers to a decline in the Net Asset Value (the actual value of the assets held by the fund). While a falling share price is a "share-price decline," it does not always mean the NAV has declined. For this ETF, the erosion-risk score is 55, which is labeled as "moderate price erosion." This is a measurement of risk rather than proof that the fund's value has collapsed.

Top Holdings

The following are some of the top holdings in this portfolio (note that this is a partial list):

• Sociedad Quimica y Minera de Chile SA ADR (8.24%)

• Albemarle Corp (8.04%)

• MP Materials Corp Ordinary Shares Class A (6.40%)

• PLS Group Ltd (6.12%)

• Lynas Rare Earths Ltd (5.99%)

• China Northern Rare Earth (Group) High-Tech Co Ltd Class A (5.85%)

Pros

• The three-year total return is positive at approximately 3.00%.

• The ETF provides a distribution yield of approximately 2.10%.

Cons

• The one-year and YTD price returns have been negative.

• The five-year total return is significantly negative at approximately -33.68%.

• The fund shows a moderate erosion-risk score.

Beginner takeaway

When looking at ETFs like REMX, it is helpful to compare the price return to the total return. In some periods, the total return is higher than the price return because of distributions. However, high yields do not guarantee that an investor will make money if the share price is falling. Always look at total returns to see the full picture of how an investment has performed over time.