Sprott’s Steve Schoffstall joins Benzinga’s Michael Murray and Anne-Marie Baiynd to discuss uranium, lithium and Sprott’s energy transition ETFs—including URNM, URNJ and LITP on Benzinga’s State of the Markets: ETF Capital Insights.
Michael Murray, Benzinga: Let's move into our ETF fund focus. We're going to look at a few different funds here. To do that, we're going to bring on our first guest into the ETF Capital Insights show, Steve Schoffstall, Director of ETF Product Management over at Sprott Asset Management. Steve, thank you so much for joining us. How are you?
Steve Schoffstall, Sprott: Doing well, thanks for having me.
Michael Murray: Pleasure to have you here. Anne-Marie [Baiynd] is going to jump in with a few questions for you about Sprott ETFs and what you guys are doing. Before I let her take it away though, give us a quick 30-second overview of Sprott Asset Management and what you guys do over at the firm.
Steve Schoffstall: Yeah, absolutely. We're about a $25 billion asset manager. We're traditionally known for our precious metals and closed-end trusts, which account for a majority of our assets. More recently, in the last two years or so, we've started moving into the energy transition space. We've developed a lot of knowledge throughout the last several decades on all things mining and metals.
Steve Schoffstall: About two years ago we actually offered a closed-end trust which holds physical uranium. It's our Sprott Physical Uranium closed-end fund. It has about $3.5 billion in assets, and we've since parlayed that into a launch of about six different energy transition ETFs, all focused on providing pure-play* exposure to different miners within the energy transition, including uranium, junior uranium miners, lithium, nickel, junior copper miners, and nickel miners. When we came up with this lineup, we really looked at the investment landscape and wanted to provide some investment solutions that we thought were lacking at the time.
Michael Murray: Fantastic. Now, Anne-Marie, I know we've got another ETF we're going to discuss at the end of the ETF market segment. But while we have Steve here, let's go ahead and jump in and talk about Sprott specifically. Take it away with any questions we've got for Steve.
Anne-Marie Baiynd, Benzinga: Well, Steve was really fantastic before we went live talking to me about all the things that they manage there. What I find amazing is that in this metals and mining space where they grew out of, all of these metals, and mining in those metals, are creating energy events for us. That's sort of the new thing because the only thing we'd ever looked at from an energy perspective essentially is oil, other than steam. Now, we're getting into the space of all these metals. Steve, tell us in terms of future growth you see—particularly [with regard to] the uranium ETF, and say something like lithium, which is really growing also at a very fast pace. Tell us where you see the charts moving and where… well, not chart so much, but the investment under management—see where you see it moving towards and what kinds of opportunities you see opening up in the physical space and in this equity space for many of these that are just equity-based.
Steve Schoffstall: Yeah. I mentioned our Sprott Physical Uranium Trust at the top. We also have a Sprott Uranium Miners ETF, which has about $900 million in assets, [it] trades fairly actively throughout every trading day, and particularly around news events, [when] we'll see large spikes in volumes. It's a very liquid investment, easy for people to get in and out of when taking a position. Combined with those two products we're seeing in the neighborhood of $4.4, 4.5 billion in assets that when it comes to the uranium story—it's really a long-term story. Data coming out of the International Atomic Energy Agency suggests that all of the mined supply that's coming out of the various mines around the world won't necessarily be able to keep up with demand over the next 14 years.
Steve Schoffstall: We came out of this period once we exited the Cold War, we had these huge stockpiles of uranium around the globe and that's since been really depleted. Typically, once you start going to the earlier part of this century, we saw about half of the uranium that was being consumed was actually coming from mine capacity, which meant that the rest was coming from stockpiles.
Steve Schoffstall: When it comes to where we're at today, we're seeing now about 95% actually coming from mining capacity. We're entering this period of time where we really need to ramp up supply. Just really quickly on lithium, we're seeing there the same thing. When you look at the International Energy Agency, they're expecting growth in lithium and other battery metals to increase up to about 42 times by 2040, just given the EV revolution that's just at the early stages.
Anne-Marie Baiynd: Excellent. Can we go to the Sprott website to learn about these particular things going on inside of the ETFs to get more information?
Steve Schoffstall: Absolutely. If you go to sprottetfs.com, that houses all of our ETFs. We recently just published a research paper on critical minerals and the energy transition. It's a very detailed paper, which really looks at about nine different critical minerals as they relate to the generation, transmission, and storage of clean energy.
Anne-Marie Baiynd: Excellent. Well, I'm going to head right there and get that, and we'll put a link there with this information that we present here. Thank you so much for entertaining all my questions. I appreciate it. We look forward to really digging into these ETFs and watching them grow.
Steve Schoffstall: Thank you.
Michael Murray: Absolutely. Steve, before we let you go too, really quickly, just a final question for me. It's obviously been our pleasure to work with Sprott pretty closely to get a lot of what you guys are doing in this mineral space out in front of our audience. Are there any other ETFs that you think are important to highlight in addition to just the uranium [funds] as Anne-Marie just talked about too? Anything else that you think is particularly prescient, even just this week with trending news and what we have going on in the markets?
Steve Schoffstall: You mentioned uranium. We talked a good bit about that. We have two funds, ETFs dedicated to that ticker, URNM, which is an all-cap Uranium Miners ETF, a fund that we've seen a lot of upticks and a lot of higher volume here recently as news in the uranium market has been developing over the last three or four trading days is ticker URNJ, that's a Junior Uranium Miners ETF. Typically, much smaller cap names than URNM, [it] also provides those opportunities for growth. You generally see more volatility as it is a smaller cap index, but we've seen a lot of interest in that.
Then just rounding out our suite for anyone that might understand the merits of the energy transition but doesn't know exactly which aspect they want to invest in, we have the Sprott Energy Transition Materials ETF, ticker SETM, which really provides that broad-based, pure-play* exposure to nine different critical minerals.
Michael Murray: Terrific. Steve, like I said, it's a pleasure to be partnered with you and Sprott. Great to have you on here even for a few minutes, just highlighting a couple of the ways that investors can get involved in this space with Sprott ETFs. We definitely look forward to talking with you again soon. Always a pleasure to have you on. Thank you again for joining us on ETF Capital Insights.
Steve Schoffstall: Happy to be here. Thank you.
Please Note: The term “pure-play” relates directly to the exposure that the Funds have to the total universe of investable, publicly listed securities in the investment strategy.
The Sprott Funds Trust is made up of the following ETFs (“Funds”): Sprott Gold Miners ETF (SGDM), Sprott Junior Gold Miners ETF (SGDJ), Sprott Energy Transition Materials ETF (SETM), Sprott Lithium Miners ETF (LITP), Sprott Uranium Miners ETF (URNM), Sprott Junior Uranium Miners ETF (URNJ), Sprott Junior Copper Miners ETF (COPJ) and Sprott Nickel Miners ETF (NIKL). Before investing, you should consider each Fund’s investment objectives, risks, charges and expenses. Each Fund’s prospectus contains this and other information about the Fund and should be read carefully before investing.
A prospectus can be obtained by calling 888.622.1813 or by clicking these links: Sprott Gold Miners ETF Prospectus, Sprott Junior Gold Miners ETF Prospectus, Sprott Energy Transition Materials ETF Prospectus, Sprott Lithium Miners ETF Prospectus, Sprott Uranium Miners ETF Prospectus, Sprott Junior Uranium Miners ETF Prospectus, Sprott Junior Copper Miners ETF Prospectus and Sprott Nickel Miners ETF Prospectus.
Investors in these Funds should be willing to accept a high degree of volatility in the price of the Funds' shares and the possibility of significant losses. An investment in the Funds involves a substantial degree of risk. The Funds are not suitable for all investors. The Funds are non-diversified and can invest a more significant portion of assets in securities of individual issuers than diversified funds. As a result, changes in a single investment’s market value could cause more significant share price fluctuation than in diversified funds.
Exchange Traded Funds (ETFs) are bought and sold through exchange trading at market price (not NAV) and are not individually redeemed from the Fund. Shares may trade at a premium or discount to their NAV in the secondary market. Brokerage commissions will reduce returns. "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 experiencing investment losses. ETFs are considered to have continuous liquidity because they allow for 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.
Nasdaq®, Nasdaq Sprott Energy Transition Materials™ Index, Nasdaq Sprott Lithium Miners™ Index, Nasdaq Sprott Junior Uranium Miners™ Index, Nasdaq Sprott Junior Copper Miners™ Index, Nasdaq Sprott Nickel Miners™ Index, NSETM™, NSLITP™ , NSURNJ™, NSCOPJ™ and NSNIKL™ are registered trademarks of Nasdaq, Inc. (which with its affiliates is referred to as the “Corporations”) and are licensed for use by Sprott Asset Management LP. The Product(s) have not been passed on by the Corporations as to their legality or suitability. The Product(s) are not issued, endorsed, sold, or promoted by the Corporations. THE CORPORATIONS MAKE NO WARRANTIES AND BEAR NO LIABILITY WITH RESPECT TO THE PRODUCT(S).
Sprott Asset Management USA, Inc. is the Adviser to the Sprott ETF. Sprott Asset Management LP is the Sponsor of the Fund. ALPS Distributors, Inc. is the Distributor for the Sprott Funds Trust and is a registered broker-dealer and FINRA Member.
ALPS Distributors, Inc. is not affiliated with Sprott Asset Management LP.
You can purchase and trade shares of Sprott ETFs directly through your online brokerage firm; these firms may include:
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