4 Metals ETFs to Consider in 2025
Metals remain fundamental pillars of the global economy, powering industries from infrastructure to green energy. Industrial base metals like copper and aluminum are becoming increasingly vital as the world shifts to lower-carbon solutions. Precious metals such as gold and silver also maintain demand from both industry and investors, setting the stage for potential price increases.
For investors looking to capitalize on these trends, exchange-traded funds (ETFs) offer an accessible way to tap into broad and diverse metals markets without selecting individual stocks. Here are four top ETFs to watch in 2025, highlighting different segments within the metals space:
1. SPDR S&P Metals & Mining ETF (XME)
This ETF focuses on U.S.-based metals and mining companies, spanning aluminum, coal, copper, gold, silver, and steel sectors. It employs an equal-weight strategy to balance exposure across roughly 30 holdings, including significant players like MP Materials and Warrior Met Coal. With a low expense ratio of 0.35%, it’s an attractive option for investors seeking broad access to the domestic metals sector.
2. iShares MSCI Global Metals & Mining Producers ETF (PICK)
PICK offers exposure to over 225 global non-precious metals mining companies, including giants such as BHP Group and Rio Tinto. Using a market-weighted approach, this ETF captures the largest players in the international metals market. Its 0.39% expense ratio and diversified portfolio make it a solid choice for those aiming at worldwide metals production.
3. VanEck Rare Earth/Strategic Metals ETF (REMX)
REMX targets companies involved in rare earth and strategic metals crucial for technology and green energy sectors. Holdings include MP Materials and Lynas Rare Earths. This ETF is particularly suited for investors interested in the emerging metals market that supports innovation and sustainable technologies, carrying a modest 0.58% fee.
4. Invesco DB Base Metals Fund (DBB)
DBB invests in futures contracts for base metals like copper, aluminum, and zinc, offering a way to trade actual metal prices rather than mining stocks. While it provides potential for short-term gains amid rising metal prices, this fund is more speculative and best suited for sophisticated investors comfortable with volatility. The expense ratio stands at 0.79%.
Investment Outlook
The increasing demand for metals driven by infrastructure growth and clean energy transitions underpins long-term price appreciation potential. Metals ETFs allow investors to participate in this trend broadly, serving as a hedge against inflation and a gateway to diverse company profiles.
However, volatility remains a key risk, particularly in economic downturns. Metals ETFs may also underperform peak individual stocks and do not always perfectly hedge inflation. Investors should carefully assess their investment horizon and risk tolerance before diving in.
Overall, metals ETFs present a compelling opportunity for those seeking exposure to a sector poised for significant transformation and economic impact in the years ahead.
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