Sprott Asset Management, the fund management arm of Sprott Inc. [NYSE:SII], has launched four Exchange Traded Funds focused on providing investors with pure-play exposure to critical minerals essential to the generation, transmission and storage of cleaner energy. The four funds are Sprott Energy Transition Materials ETF (Nasdaq: SETM), Sprott Lithium Miners ETF (Nasdaq: LITP), Sprott Junior Uranium Miners ETF (Nasdaq: URNJ) and Sprott Junior Copper Miners ETF (Nasdaq: COPJ).
Sprott Inc. will be known to most investors in mining stocks as a global leader in precious metal and energy transition investments. It already pursues a number of investment strategies including Exchange Listed Products, Managed Equities and Private Strategies.
Why energy transition materials?
As nations around the world embrace mandates that require sharp reductions in their carbon emissions, Sprott’s new Energy Transition ETFs enable investors to gain convenient, liquid exposure to the miners of critical minerals that may benefit from quickly increasing demand, limited supplies and the challenges of bringing minerals to market.
“2022 was a global wake-up call regarding the importance of energy transition and security,” said John Ciampaglia, CEO of Sprott Asset Management. “Certain critical minerals serve as raw materials that are required to meet the growing need for low-carbon energy, increased electrification and the transition to electric vehicles. Due to years of underinvestment, demand for many energy transition materials now outstrips supply. We believe mining companies focused on energy transition minerals are well positioned to benefit from the significant investments that will be required over the coming decades.”
The funds track indices Sprott Asset Management has developed in partnership with Nasdaq, which will also list the ETFs on its exchange. Below are highlights on just three of the new funds. Investors should note that it is often impossible to exactly follow an index with an ETF, and that fees and operational costs will over time exert a drag on the performance of ETFs versus their assigned index.
However, the ETFs below do provide an easy way for investors in US stocks to gain exposure to quite a wide portfolio of mining stocks in the energy transition sector, which looks set to be a very interesting area of the investment universe to be in the next decade.
1. Sprott Energy Transition Materials ETF
Tracks the Nasdaq Sprott Energy Transition Materials Index. The Index is designed to track the performance of a selection of global securities in the energy transition materials industry.
2. Sprott Lithium Miners ETF
Seeks to track the total return performance of the Nasdaq Sprott Lithium Miners Index. The Index is designed to follow the performance of a selection of global securities in the lithium industry, including lithium producers, developers and explorers.
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3. Sprott Junior Uranium Miners ETF
Seeks to provide investment results that, before fees and expenses, correspond generally to the total return performance of the Nasdaq Sprott Junior Uranium Miners™ Index (NSURNJ™), which is designed to track the performance of mid-, small- and micro-cap companies in uranium mining-related businesses.
4. Sprott Junior Copper Miners ETF
Aims to track the total return performance of the Nasdaq Sprott Junior Copper Miners (NSCOPJ), which is designed to follow the performance of mid-, small- and micro-cap companies in copper mining-related businesses.
The Sprott Uranium Miners ETF fund is an existing ETF product but is very much related to the newly launched funds.
Sprott Uranium Miners ETF
Seeks to invest at least 80% of its total assets in securities of the North Shore Global Uranium Mining Index (URNMX). The Index is designed to track the performance of companies that devote at least 50% of their assets to the uranium mining industry, which may include mining, exploration, development and production of uranium, or holding physical uranium, owning uranium royalties or engaging in other non-mining activities that support the uranium mining industry.
