A filing made this week outlines Sprott’s plans to launch an exchange-traded fund focused on companies involved in mining and processing the materials needed for technologies that support the global transition to net-zero carbon emissions.
The Sprott Energy Transition Materials ETF does not yet have a ticker or expense ratio. However, it will track an index provided by Nasdaq. Generally, the term “energy transition materials” for the purposes of the fund refers to uranium, copper, lithium, nickel, cobalt, graphite, manganese, rare earths and silver, according to the prospectus.
The index’s methodology includes caps on individual companies and commodity groups, the document notes.
Earlier this year, Invesco launched the Invesco Electric Vehicle Metals Commodity Strategy No K-1 ETF (EVMT), which has a similar focus but holds commodity futures on cobalt, nickel, iron ore, aluminum, copper, zinc and silver. The fund rolled out in April, but has been slow to gather assets; EVMT currently only has about $20 million in assets under management.
Unlike the proposed Sprott fund, EVMT is actively managed.
“By 2025, it's estimated that plug-in vehicles will represent 23% of new passenger vehicle sales globally. We were just under 10% in 2021,” said Kathy Kriskey, head of commodity and alternative ETF products at Invesco, who further notes that nickel, which is the largest commodity in the fund, at 39% of the portfolio, faces a shortage by 2024.
Contact Heather Bell at [email protected]