Sprott Has Thematic, Critical Materials ETFs in Focus

Sprott Asset Management, a leading provider of resource and commodity exchange-traded funds, is bullish on thematic ETFs, particularly those focused on critical materials. In an interview with etf.com, Jacob White, Sprott's ETF Product Manager, dove into the exciting trends shaping the ETF landscape.

Thematic ETFs, targeting specific themes like artificial intelligence (AI) and clean energy, are rapidly gaining traction according to White. "We think that whether it's AI, which is really topical right now, or clean energy, or electric vehicles, there's a lot of significant growth potential," he says.

Sprott, he said, has a unique angle within the thematic space. "We're specifically really interested in critical materials and how they underpin a lot of these mega themes," explains White. He highlights the growing demand for copper, a key component in AI and electrical systems, amidst a pre-existing supply deficit.

This focus on critical materials aligns perfectly with the advantages of ETFs, according to White. "The structure of an ETF, diversifying idiosyncratic risk and a cost-effective structure, is really starting to take off" for thematic investing in critical materials.

Sprott Recognized at etf.com Awards

Beyond thematics, Sprott boasts a collection of intriguing commodity and resource ETFs. Two of Sprott’s products were nominees for the tenth annual etf.com Awards. The Sprott Junior Uranium Miners ETF (URNJ) was a final contender for the “Best New International/Global Equity ETF” category. Launched in 2023, URNJ offers exposure to a niche space that was previously difficult for investors to access. "We've been able to garner a lot of assets," says White, pointing to uranium's impressive performance in 2022, up 90% compared to the broader commodities market.

The Sprott Uranium Miners ETF (URNM) ended up taking home the trophy for the “Best Thematic ETF of the Year” category. As one of the few funds offering exposure to uranium, URNM outperformed 99% of its natural resources category peers and more than doubled the return of the S&P 500 index in 2023, making the commodity an attractive investment for investors looking for portfolio diversification to consider.