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Stoxx limted launches global rare earth index

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STOXX Limited, the market-moving provider of innovative, tradable and global index concepts, today introduced the STOXX Global Rare Earth Index, which consists of companies that generate at least 30% of their revenues in the rare earth sector globally..


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The importance of what is known as “rare earth” metals is growing as these elements are used in a multitude of high-tech products such as mobile telephones, hard drives, lasers and electric car batteries.
The STOXX Rare Earth Index is designed to underlie exchange-traded funds and other investable products, as well as to be used to assess the performance of global equity portfolios.

“The demand for rare earth metals is increasing exponentially as they are used in a wide range of modern technology, from iPods to hybrid cars, wind turbines and batteries,” said Hartmut Graf, chief executive officer, STOXX Limited. “With the launch of the STOXX Global Rare Earth Index, we offer market participants an innovative, transparent and completely rules-based tool to participate in the performance of companies that are involved in this rapidly growing sector.”

Rare earth metals are part of a group of 17 chemically similar elements found in the earth’s crust. Despite their name, rare earth metals are more abundant than gold, platinum or lead. The term “rare” is derived from the fact that these elements are rarely found in high concentration in a single reserve and are primarily mined in China at present. The metals are found almost exclusively in connection with other minerals or metals, as they are often extracted as a by-product in the mining of other raw materials.

All companies that generate at least 30% of their revenues in the rare earth sector globally, or are estimated to do so based on their current operating activities, and have an average daily value traded (ADVT) of at least 1 million US dollars are eligible for inclusion in the index. The rare earth sector covers companies with operations involving exploration, extraction, transport, processing or any other business involving any of the following 17 rare earth elements: Scandium, Yttrium, Lanthanum, Lutetium, Ytterbium, Thulium, Erbium, Holmium, Dysprosium, Terbium, Gadolinium, Europium, Samarium, Promethium, Neodymium, Praseodymium, and Cerium.

The STOXX Global Rare Earth Index is weighted by free-float adjusted market capitalization. The index currently consists of 14 components. It is rebalanced quarterly, and component review takes place semi-annually in March and September. The new index is available in price, gross and net return versions in euro and U.S. dollar. Daily history is available back to June 19, 2009.

Source: ETFWorld – STOXX Limited 

 

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