Frequently Asked Questions (FAQs)

Rare earth elements (REEs) are a subset of critical materials, consisting of 17 chemically similar elements essential to high-performance technologies. While critical materials include resources vital to economic stability and national security, rare earths play a uniquely important role within this group.

Rare earths are considered critical materials, joining other metals such as copper, uranium and lithium.

Despite the name “rare earths,” these elements are relatively abundant in the Earth’s crust. However, they are rarely found in concentrated, economically viable deposits, making rare earth mining projects scarce. Further, the task of separating them is one of the most challenging and energy-intensive processes in modern chemistry (as REEs have very similar chemical properties).

Rare earths are critical for a variety of strategic sectors: 

• Defense – Crucial for radar systems and satellites, missile guidance systems and anti-missile defense. They’re also used in fighter jets, submarines and drones. 
• Technology – Essential to AI data centers, robotics, semiconductors chips manufacturing and navigation systems.
• Energy – Used in nuclear reactors, batteries and fuel cells, wind turbines, solar panels, hydro energy and catalytic converters. 
• Other – Required by common consumer technologies like cell phones, LCD displays, headphones, MRI scanners, fluorescent light bulbs and air conditioners. 

The Sprott Rare Earths Ex-China ETF is listed on Nasdaq^® under the symbol “REXC.” Investors can purchase REXC in a brokerage account or by contacting their financial advisor.

The Sprott Rare Earths Ex-China ETF (REXC) seeks to provide investment results that, before fees and expenses, correspond generally to the total return performance of the Nasdaq Sprott Rare Earths Ex-China™ Index.

The Nasdaq Sprott Rare Earths Ex-China™ Index (NSREXC™ or the Index) is designed to track the performance of a selection of global securities outside of China in the rare earths industry, including mining, separation, refining or production of rare earths.

REXC is the only¹ ETF providing focused pure-play² exposure to rare earths companies. The ETF invests exclusively in companies outside of China that may have significant growth potential as supply chain security becomes a national priority.

¹Based on Morningstar’s universe of Natural Resources Sector Equity ETFs as of 4/14/2026.
²The term “pure-play” relates directly to the exposure that the Fund has to the total universe of investable, publicly listed securities in the investment strategy.

The term “pure-play” relates directly to the exposure that the Fund has to the total universe of investable, publicly listed securities in the investment strategy. REXC seeks to achieve its objective by investing at least 80% of its total assets in companies that derive at least 50% of their revenue and/or assets from mining, exploration, development, separation, refining, or production of rare earths, as per the methodology of the Index it tracks. 

The Index combines Sprott’s decades of experience in the metals and mining sectors with Nasdaq’s renowned index expertise. To be eligible for inclusion in the Nasdaq Sprott Rare Earths Ex-China Miners™ Index, a company must meet the requirements that follow.

Eligibility Requirements

• Be a security listed on an approved exchange, outside China.
• A security's issuer must be classified by Sprott as a company that derives at least 25% of their revenue and/or assets from mining, exploration, development, separation, refining, or production of rare earths. 
• Have a free-float market capitalization of at least $30 million; $25 million for existing constituents.
• The security must have been publicly traded at least three months prior to the reconstitution reference date.
• A security must have a three-month average daily traded value of at least $20,000. 
• Chinese Securities are not permitted to be included in the Index.

Constituent Weighting Process

• The Index is a free float adjusted market cap-weighted index. 
• An intensity score is calculated for each company to determine the percentage of revenue or assets that are attributable to rare earths. Free float market capitalization is used to weight companies with an intensity score greater than 50%. Companies with an intensity score of 25% – 50% are given an adjusted market capitalization by multiplying the intensity score and its free float market capitalization, and the company’s weight in the Index is determined by its adjusted market capitalization.
• As of the semi-annual Index selection dates:
  • The weighting of any individual company, by free float market capitalization, may not exceed 20% of the value of the Index.
  • The aggregate weighting of all constituents over 5% of the value of the Index is capped at 49%.
  • The aggregate weighting of any security with assets and/or revenue greater than 25% but less than 50% tied to the rare earths industry is capped at 15% and the individual weighting of any of these securities is capped at 4.75%.
• At each step, the excess weight is redistributed pro-rata to each Index component that has not already reached a previous weighting cap.

Index Rebalancing

The Index is reconstituted on a semi-annual basis in June and December. Deletions from the Index may be made at any time due to changes in business, mergers, acquisitions, bankruptcies, suspensions, de-listings and spin-offs. The Index is unmanaged and cannot be invested in directly.

The Index is rebalanced quarterly. Two of the quarterly rebalances of the Index coincide with the June and December reconstitutions discussed above. The other two quarterly rebalances of the Index become effective on the first trading day following the third Friday of March and September of each year.

Investors who seek pure-play access to rare earths through investment in companies outside China, which may have significant growth potential as supply chain security becomes a national priority. These companies may benefit from investment, critical material alliances and funding for strategic stockpiling of critical materials by developed countries.

Sprott Asset Management USA, Inc. is the investment adviser to the Sprott Rare Earths Ex-China ETF. ALPS Advisors, Inc. is the sub-adviser, and ALPS Fund Services, Inc. serves as the administrator. ALPS Distributors, Inc. is the Distributor for the Sprott Rare Earths Ex-China ETF and is a registered broker-dealer and FINRA Member. ALPS Distributors, Inc. is not affiliated with Sprott Asset Management USA, Inc. Additionally, State Street Bank and Trust Company serves as the custodian and transfer agent.

There are three macro drivers of investment opportunity in rare earths equities: 

• Strategic Importance of Rare Earths – Rare earths are critical to global defense systems, energy and electrification, AI and datacenters, semiconductors, robotics, EVs and advanced technologies.
• Supply Chain Security – China’s dominance and past export controls have made rare earths a national security priority.
• Focused Investment in Ex-China Companies – Investment, critical material alliances and funding for strategic stockpiling by developed countries are providing ex-China investment opportunities. These companies may be well-positioned to benefit from the increased investment in national security priorities.

The Sprott Rare Earths Ex-China ETF expects to declare and distribute all its net investment income, if any, to shareholders as dividends at least annually and on a pro-rata basis. The Fund may distribute such income dividends and capital gains more frequently, if necessary, to reduce or eliminate federal excise or income taxes on the Fund.

Please reach out to your Sprott representative at 888.622.1813 or criticalmaterials@sprott.com for answers to additional questions.