As emerging industries such as new energy, artificial intelligence, low-altitude economy, and humanoid robots enter a phase of large-scale expansion, the industrial positioning of upstream critical materials, particularly rare metals, is quietly undergoing a transformation.

For a long time, demand for rare metals was largely anchored in traditional steel, chemicals, and consumer electronics, driven primarily by resource price fluctuations and closely tied to conventional industrial cycles. Today, as the downstream application landscape is being reshaped, the strategic value of these materials—often dubbed the "industrial vitamins" of advanced manufacturing—is poised for a systematic revaluation.

This evolution is not an overnight development. The core forces driving demand are shifting from traditional industries to a multitude of emerging sectors, including new energy, AI, low-altitude economy, and humanoid robots. In the rapidly growing new energy sector, for instance, high-performance rare earth permanent magnets are indispensable core components in both electric vehicle drive motors and wind turbine direct-drive units. Meanwhile, the continued expansion of the energy storage industry is solidifying the medium-to-long-term demand foundation for metals like tungsten and antimony.

Beyond new energy, the rapid surge in the AI computing power chain is generating differentiated incremental demand. High-speed optical modules, advanced packaging chips, and computing power supply equipment are consuming gallium, germanium, indium, and tantalum at unprecedented rates. The rising penetration of gallium nitride semiconductor materials is also continuously broadening application scenarios. Additionally, while the humanoid robot and low-altitude economy sectors are still in their early commercialization stages, their potential demand for rare metal functional materials in joint motors, sensors, and high-temperature alloys is beginning to take shape and could become the second growth curve for the industry in a few years.

This diversification of demand means that supply-demand dynamics across different metal varieties are not uniform, and periodic fluctuations in any single metal can be partially offset by the overall resilience of industry demand.

Where to Begin

According to research from Dongxing Securities, the supply-demand structure of the minor metals industry is showing sustained and significant improvement. The supply side continues to exhibit strong rigidity within a weak supply cycle, while the demand side is being driven by industrial chain upgrades, green energy transition, the development of new quality productive forces, and the advent of the computing power capital cycle, pushing the demand curve effectively to the right. This aligns with the current characteristics of the rare metals sector, where upstream supply is constrained by uneven resource distribution, stricter environmental regulations on mining, and high technical barriers in downstream processing.

The combination of changes on both the supply and demand sides is shifting the sector's long-term allocation logic from a simple bet on commodity price cycles toward continuous tracking of the dual themes of resource security and industrial transformation.

ICBC Credit Suisse Fund believes that the current supply of non-ferrous metals remains tight, while rapid growth in emerging demand from AI and new energy sectors is driving high performance in the sector. Combined with overseas macroeconomic policy catalysts and market style shifts, the commodity trend for non-ferrous metals remains strong, and the sector is expected to continue its upward trajectory after volatility.

For ordinary investors, this evolution also presents real challenges that cannot be ignored. Rare metals encompass multiple categories including rare earths, dispersed metals, and refractory metals. The resource endowments, downstream applications, and supply-demand logic differ significantly across varieties, making it difficult to generalize. The growth pace and material demand characteristics of each niche track also vary. Analyzing each metal individually is time-consuming and demands a high level of professional expertise.

In this context, using an index-based tool for a one-basket allocation has become a practical choice for lowering research barriers and smoothing out volatility in individual metals. The CSI Rare Metals Thematic Index (930632) offers a comprehensive industrial map for this purpose.

Why Just 10 ASX 200 Shares?

The index selects no more than 50 listed companies involved in rare metal mining, smelting, and processing as its samples. A single sample's weight is capped at 15%, and the combined weight of the top five samples does not exceed 60%, balancing a focus on sector leaders with portfolio diversification. The semi-annual sample rebalancing mechanism allows the index to dynamically adapt to industrial development and market capitalization shifts, promptly incorporating high-quality targets with growth potential.

From an industry coverage perspective, its constituent stocks span multiple segments including lithium, rare earths, tungsten, cobalt, molybdenum, and germanium, covering the entire chain from upstream resource extraction to midstream smelting and processing. This also aligns with the highly differentiated nature of the rare metals industry. From a valuation perspective, the index's valuation levels fluctuate with industry cycles, exhibiting distinct characteristics at different stages. For investors with long-term allocation needs, combining the index's historical valuation percentile with industry fundamentals analysis may help secure a better safety margin when market sentiment is cold and valuations are at relatively low levels.

It should be noted that the rare metals sector possesses dual commodity and financial attributes. Price fluctuations are influenced by multiple factors including the global macroeconomic environment, supply-demand relationships, and policy changes. Investors should prudently assess its allocation value from a medium-to-long-term perspective.

For investors addressing these multifaceted characteristics, the Rare Metals ETF ICBC (159671), which closely tracks the CSI Rare Metals Thematic Index, provides a convenient allocation tool. This fund adopts a full replication strategy with relatively controllable tracking error, and offers advantages such as operational transparency and low fees. For investors who do not have a securities account or prefer off-exchange channels, the ICBC CSI Rare Metals Thematic ETF Feeder Fund (Class A: 019087, Class C: 019088), which primarily invests in this ETF, provides an alternative path under the same logic. Investors can choose flexibly based on their investment habits and holding preferences.

While focusing on structural opportunities in rare metals, appropriately allocating to the broader non-ferrous metals sector is also a rational approach to diversifying single-track risk. The Non-Ferrous ETF ICBC (159049) tracks the CSI Non-Ferrous Metals Mining Thematic Index, focusing on upstream mineral resources and covering core resource categories such as industrial metals, precious metals, energy metals, and rare metals. Its industry distribution is relatively balanced, helping to diversify the impact of price fluctuations in any single metal. Investors looking to balance both the rare metals track and the overall non-ferrous metals sector vitality can incorporate both products into a differentiated allocation framework.

Currently, the rare metals industry is in a new development phase where policy controls constrain supply, emerging industries create incremental demand, and technological upgrades determine profitability. Short-term price fluctuations are inevitable, but over the medium-to-long term, its value as strategically critical raw materials continues to rise. Using corresponding index tools for relatively balanced allocation may be a viable path to pursuing long-term relative certainty in a rapidly rotating market environment.

Fee Disclosure

1. Trading fees for the Rare Metals ETF ICBC on-exchange are subject to actual charges by securities firms. When investors subscribe or redeem fund shares, the subscription/redemption agent broker may charge a commission of up to 0.5%, which includes fees charged by stock exchanges and registration institutions. Operating fees: The fund's annual management fee is 0.45%, and the annual custody fee is 0.07%.

2. Trading fees for the Non-Ferrous ETF ICBC on-exchange are subject to actual charges by securities firms. When investors subscribe or redeem fund shares, the subscription/redemption agent broker may charge a commission of up to 0.3%, which includes fees charged by stock exchanges and registration institutions. Operating fees: The fund's annual management fee is 0.50%, and the annual custody fee is 0.10%.

3. Fees for the ICBC CSI Rare Metals Thematic ETF Feeder Fund: Class A shares subscription fee (front-end): If subscription amount M is less than RMB 1 million, the subscription fee rate is 1.0%; if 1 million ≤ M < 3 million, the rate is 0.80%; if 3 million ≤ M < 5 million, the rate is 0.6%; if M ≥ 5 million, the subscription fee is RMB 1,000 per transaction. Redemption fee: If holding period is Y days, for both Class A and Class C shares: if Y < 7 days, the redemption fee rate is 1.50%; if Y ≥ 7 days, the rate is 0.00%. Operating fees: The fund's annual management fee is 0.45%, the annual custody fee is 0.07%, and the Class C share sales service fee is 0.1% per annum. Class A shares do not charge a sales service fee, and Class C shares do not charge a subscription fee.

Risk Warning

Opinions are for reference only, are time-sensitive, and do not constitute investment advice or return commitments, nor do they represent the fund's specific future allocation direction. The fund manager operates and manages fund assets in accordance with the principles of due diligence, honesty, creditworthiness, and prudence, but does not guarantee that the fund will be profitable or ensure minimum returns. Past fund performance does not predict future results. Performance of other funds managed by the fund manager does not constitute a guarantee of this fund's performance. The Rare Metals ETF ICBC, Non-Ferrous ETF ICBC, and ICBC CSI Rare Metals Thematic ETF Feeder Fund are all equity funds, with expected returns and risk levels higher than hybrid funds, bond funds, and money market funds. The Rare Metals ETF ICBC and Non-Ferrous ETF ICBC are index funds that primarily adopt a full replication strategy to track the market performance of the underlying index, exhibiting risk-return characteristics similar to the underlying index and the stock market it represents. Investing in ETFs involves specific risks including underlying index volatility risk and the risk of deviation between the fund's portfolio returns and the underlying index returns. The ICBC CSI Rare Metals Thematic ETF Feeder Fund is an ETF feeder fund that tracks the underlying index performance by investing in the target ETF, with risk-return characteristics similar to the underlying index and the securities market it represents. Funds carry risks. Before investing, investors should carefully read the Fund Contract, Prospectus, Fund Product Information Summary, and updates, and choose investment products suitable for their own risk tolerance based on a comprehensive understanding of product details, fee structures, and fee standards of various sales channels, while also considering the suitability opinions of sales institutions. Fund investment requires caution.