An Active ETF Approach to Gold and Silver Investing

Global assets in active ETFs hit $1.3 trillion in early 2025. In the U.S. alone, active ETFs will soon reach $1 trillion if they haven’t already. Of the 95% of investors who plan to increase ETF exposure this year, 97% intend to increase their active ETF allocations, up from 78% in 2024.

The data doesn’t discount the power of passive index investing. It reflects the reality that ETF investors have more choices than ever to diversify in and around their portfolio’s core. 

The Sprott Active Gold & Silver Miners ETF (GBUG) illustrates this diversification opportunity in gold and silver mining. Sprott Asset Management’s launch of the actively-managed GBUG ETF comes at a particularly opportune moment. Gold has broken out to all-time highs, and silver appears undervalued relative to gold amid rising demand and stagnant supply. 

GBUG gives investors who would like targeted exposure to gold and silver miners the opportunity via an actively managed ETF. 

The Case For Active Management in Mining Equities 

As gold and silver prices climb, related mining equities may have significant room to catch up to the physical metals. However, gold and silver miners have historically demonstrated a wide range of returns. 

Consider the uneven performance among stocks in the NYSE Arca Gold Miners Index. 

This dispersion of returns shows that stock-picking in precious metals matters, and having boots on the ground in mines worldwide may help portfolio managers identify undervalued miners.

Sprott conducts up to 30 site visits globally each year and holds more than 200 management meetings yearly, including meetings with boards of directors at mining companies. These visits and meetings have occurred in countries such as Australia, Canada, Mexico, Morocco, Peru, Spain, Senegal and the U.S.  

Sprott’s active management team—the people making the visits and asking the questions—includes John Hathaway, Maria Smirnova, Shree Kargutkar, Justin Tolman and Victor Huwang, who bring more than a century of collective experience. Having active managers look closely at individual companies aids stock selection, leading to a high-conviction portfolio of miners with prospects for strong growth or takeover potential. Given the considerable variability of individual company performance within the mining sector, the relationships this investment team builds matter. 

When selecting stocks for GBUG, Sprott assesses multiple factors, including management capability, corporate governance, asset quality, balance sheet and income statement analysis, geopolitical exposure and individual mine geology and economics.
Before including a company in GBUG, Sprott completes a comprehensive and repeatable five-step investment process:
 

1. Management: Does management have a demonstrated track record of seeing a project through? Does their compensation align management and shareholder interests? 
2. Mines & Minerals: Technical analysis focused on geology, size potential, mineralogy, infrastructure and land access, plus sensitivity analysis to determine technical feasibility and upside potential
3. Money: A complete capital structure and funding requirement analysis that examines potential free cash flow generation, net present value and sensitivity to commodity prices
4. Political Risk: Sprott’s Proprietary “Heat Map” ranks mining jurisdictions from favorable to unacceptable and monitors them for changing political risks and new or different fiscal regimes.
5. Environmental & Social Factors: Sprott considers ESG factors, including community relations, human rights, diversity and inclusion, health and safety, water management and renewable energy use.

The Bottom Line on GBUG

Amid the breakout in gold and silver and the dispersion among mining stocks, GBUG offers a timely and rigorous, research-based approach to active ETF management. Sprott’s management team combines intensive on-the-ground analysis, deep sector experience and a thorough five-step process to identify high-conviction opportunities. 

GBUG provides:

• Targeted exposure to select gold and silver miners with strong growth or acquisition potential
• A boots-on-the-ground, research-driven portfolio informed by site visits and meetings with management conducted by a team with over a century of combined experience  
• A focus on well-positioned mining companies with solid fundamentals, sound capital structure and strong ESG factors  

For investors looking to dig deeper into the gold and silver mining opportunity, it may be the right time to consider GBUG’s active management approach.

^{Important Disclosures & Definitions}

^{An investor should consider the investment objectives, risks, charges, and expenses carefully before investing. To obtain a Sprott Active Gold & Silver Miners ETF Statutory Prospectus, which contains this and other information, visit https://sprottetfs.com/gbug/prospectus, contact your financial professional or call 888.622.1813. Read the Prospectus carefully before investing.}

^{The Sprott Active Gold & Silver Miners ETF is new and has limited operating history. Investors in the Fund should be willing to accept a high degree of volatility in the price of the Fund’s shares and the possibility of significant losses. The Fund will be concentrated in the gold, silver and precious metals mining and related industries. As a result, the Fund will be sensitive to changes in, and its performance will depend to a greater extent on, the overall condition of the gold, silver and precious metals industry, highly dependent on the price of gold and silver bullion. The gold, silver and precious metals industry can be significantly affected by competitive pressures, central bank operations, events relating to international political developments, the success of exploration projects, commodity prices, adverse environmental developments and tax and government regulations. An investment in the Fund involves a substantial degree of risk. The Fund is not suitable for all investors. The Fund is considered non-diversified and can invest a greater portion of assets in securities of individual issuers than a diversified fund. As a result, changes in the market value of a single investment could cause greater fluctuations in share price than would occur in a diversified fund.}

^{The Fund adviser’s judgments about the growth, value, or potential appreciation of an investment may prove to be incorrect or fail to have the intended results, which could adversely impact the Fund’s performance relative to its benchmark.}

^{Shares are not individually redeemable. Investors buy and sell shares of the Sprott Active Gold & Silver Miners ETF on a secondary market. Only market makers or “authorized participants” may trade directly with the Fund, typically in blocks of 10,000 shares.}

^{Funds that emphasize investments in small/mid-cap companies will generally experience greater price volatility. Diversification does not eliminate the risk of investment losses. ETFs are considered to have continuous liquidity because they allow an individual to trade throughout the day. A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when Fund shares are held in a taxable account. These costs, which are not reflected in annual Fund operating expenses, affect the Fund’s performance.}

^{Sprott Asset Management USA, Inc. is the Investment Adviser to the Sprott Active Gold & Silver Miners & Physical Silver ETF. ALPS Distributors, Inc. is the Distributor for the Sprott ETFs and is a registered broker-dealer and FINRA Member. ALPS Distributors, Inc. is not affiliated with Sprott Asset Management USA, Inc.}