## [# ETF Spotlight: Is REMX a Buy as MP Materials Stock Soars?](/sections/features/etf-spotlight-remx-buy-mp-materials-stock-soars)
# ETF Spotlight: Is REMX a Buy as MP Materials Stock Soars?
\- MP Materials just announced a public-private partnership with the U.S. Department of Defense.
\- The renewed U.S. investment in MP comes amid rising tensions with China over rare earth exports.
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[By Sumit Roy ](/authors/sumit-roy)
Jul 11, 2025
Edited by: David Tony
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Shares of [MP Materials Corp. (MP)](/stock/MP) surged nearly 50% on Thursday after the company [announced](https://www.businesswire.com/news/home/20250710526348/en/MP-Materials-Announces-Transformational-Public-Private-Partnership-with-the-Department-of-Defense-to-Accelerate-U.S.-Rare-Earth-Magnet-Independence) a public-private partnership with the U.S. Department of Defense. The deal is part of the U.S. government's effort to secure a domestic rare earths supply chain and highlights the strategic importance of these materials amid rising tensions with China.
As part of the agreement, the DoD will purchase $400 million worth of newly issued preferred shares in MP Materials, convertible into common stock at $30.03 per share. That’s well below the stock’s current trading level near $44, suggesting the government is already sitting on significant paper gains. The deal would give the U.S. a roughly 15% stake in the company.
MP also secured an additional $1 billion in financing from JPMorgan and Goldman Sachs to fund construction of a second domestic magnet manufacturing facility. It also made a 10-year agreement with the DoD that guarantees that 100% of the magnets produced at the facility “will be purchased by defense and commercial customers with shared upside.”
The moves further cement MP’s role as the cornerstone of America’s rare earths ambitions. The company operates the only active rare earths mine in the U.S.—Mountain Pass, located in California’s Mojave Desert—and is one of the few firms outside of China with vertically integrated capabilities for mining and processing rare earth elements.
## Geopolitics Drives the Narrative
The renewed U.S. investment in MP comes amid rising tensions with China over rare earths exports. Earlier this year, Beijing imposed export controls on key rare earth metals in response to U.S. tariffs.
And while trade tensions have eased somewhat in recent weeks, concerns remain about U.S. vulnerability, given its heavy reliance on China for the rare earths essential to defense, energy and tech industries.
China dominates the rare earths industry, accounting for over two-thirds of global production.
For Washington, that’s unacceptable. The MP deal is part of a broader effort to de-risk U.S. supply chains across critical materials, an effort that includes everything from rare earths to copper.
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## REMX Gets a Bump But Still Trails
The [**VanEck Rare Earth/Strategic Metals ETF (REMX)**](/REMX), which counts MP Materials as its fourth-largest holding at a 6.7% weight, rose 9% on the news. But even with Thursday’s rally, the ETF is up just 17% year to date, a fraction of MP’s 183% gain over the same period.
That kind of divergence isn’t new for REMX. While the underlying theme—rare earths independence—is compelling, the fund has struggled to translate the bullish narrative into lasting performance.
Over the past five years, REMX is up just 27%, less than a quarter of the S&P 500’s 115% return during that time. Since its inception in 2010, the ETF remains down a whopping 70%.
## The Problem With REMX
A big part of the problem lies in REMX’s construction. While it includes rare earths names like MP and Australia-based Lynas Rare Earths, a significant chunk of the portfolio is exposed to China—roughly one-third by weight. The second-largest holding is China Northern Rare Earth Group, which makes up 7.3% of the fund.
The fund also casts a wide net. Beyond rare earths, REMX holds a number of lithium-focused companies like [Albemarle Corp. (ALB)](/stock/alb), at a 8.3% weight, and Pilbara Minerals Limited at 5.6%. These names have their own supply-demand dynamics and don’t always move in tandem with rare earth prices or policy headlines.
In effect, REMX ends up being a diluted play on the rare earths theme—part China exposure, part lithium bet, part pure-play names like MP.
## The Takeaway for Investors
If you’re bullish on the rare earths story, MP Materials offers the most direct exposure among U.S.-listed equities. REMX, by contrast, delivers a more diversified (and arguably diluted) basket of strategic metal producers, including lithium and Chinese firms.
Given the fund’s long history of underperformance, investors should be cautious.
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[ Sumit Roy Senior ETF Analyst ](/authors/sumit-roy)
Sumit Roy is the senior ETF analyst for etf.com and author of (Don't) Invest Like a Pro. He creates a variety of content for the platform, including… [View Bio](/authors/sumit-roy)
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