On February 1, 2023, Sprott Asset Management announced the launch of four Exchange Traded Funds (ETFs): 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).
Please Note: This FAQ is not wholly inclusive of all relevant information. Investors should consult the prospectus for more information, or please reach out to your Sprott representative at 888.622.1813 or firstname.lastname@example.org for additional questions.
The Sprott Energy Transition Materials ETF is listed on Nasdaq® under the symbol “SETM.” Investors can purchase SETM in a brokerage account or by contacting their financial advisor.
The Sprott Energy Transition Materials ETF (SETM) seeks to provide investment results that, before fees and expenses, correspond generally to the total return performance of the Nasdaq Sprott Energy Transition Materials Index.
The Nasdaq Sprott Energy Transition Materials™ Index is designed to track the performance of a selection of global securities in the energy transition materials industry. The Fund will, under normal circumstances, invest at least 80% of its total assets in securities of this Index.
The energy transition is a significant global structural change intended to decrease our dependence on fossil fuels in favor of low-carbon and renewable energy. While we believe fossil fuels will likely continue to play a role in our future, substantial global investment and government mandates in favor of low-carbon and renewable energy are driving opportunities in the energy transition industry.
The Index combines Sprott’s decades of experience in the mining sector with Nasdaq’s renowned index expertise. To be eligible for inclusion in the Nasdaq Sprott Energy Transition Materials™ Index (NSETM™), a company must meet the requirements that follow.
Constituent Weighting Process
Investors that seek pure-play2 access to a range of critical minerals necessary to the global clean energy transition through companies that are upstream in the supply chain. Miners of the critical minerals necessary for the global energy transition may be well positioned to benefit from increased investment in the low-carbon and renewable energy sector.
Clean energy is energy that has zero carbon emissions and comes from renewable and nuclear energy sources. Currently, nations around the world have committed to the Paris Agreement, which is a legally binding international treaty on climate change. It was adopted by 196 Parties at COP 21 in Paris in December 2015. Its goal is to limit global warming to well below 2, preferably to 1.5 degrees Celsius, compared to pre-industrial levels. To meet this goal, emissions need to be reduced by 45% by 2030 to reach net-zero by 2050.3
Critical minerals are natural materials that are essential to the generation, transmission and storage of clean energy. Sprott focuses on uranium, silver and rare earths as energy generation minerals; copper as an energy transmission mineral, and lithium, nickel, manganese, cobalt and graphite as the battery metals crucial to energy storage.
Sprott Asset Management LP is the investment adviser to the Sprott Energy Transition Materials ETF. ALPS Advisors, Inc. is the sub-adviser, and ALPS Fund Services, Inc. serves as the administrator. ALPS Distributors, Inc. is the Distributor for the Sprott Energy Transition Materials ETF and is a registered broker-dealer and FINRA Member. Additionally, State Street Bank and Trust Company serves as the custodian and transfer agent.
Increased investment is driving growth in the critical minerals necessary for the energy transition
To meet 2050 net-zero goals, substantial investment is needed for the foreseeable future
The Sprott Energy Transition Materials ETF is the only* ETF to provide pure-play exposure to a broad range of critical minerals and mining equities essential to the transition to cleaner energy
We believe the Sprott Energy Transition Materials ETF has broad appeal to many investors. The following general themes are driving investor interest.
The Sprott Energy Transition Materials ETF expects to declare and distribute all its net investment income, if any, to shareholders as dividends at least annually and on a pro-rata basis. The Fund may distribute such income dividends and capital gains more frequently, if necessary, to reduce or eliminate federal excise or income taxes on the Fund.
Please reach out to your Sprott representative at 888.622.1813 or email@example.com for additional questions.
* Based on Morningstar’s universe of Natural Resources Sector Equity ETFs as of 1/31/2023.
1 The intensity score for stocks with revenue and for which revenue is deemed to be an appropriate characteristic is the percentage of their revenue attributable to the aforementioned strategy of the Index.
2 The term “pure-play” relates directly to the exposure that the Fund has to the total universe of investable, publicly listed securities in the investment strategy.
3 United Nations Framework Convention on Climate Change (UNFCC).
4 Source: Energy Transition Investment Trends 2023, BloombergNEF.
5 Source: “The Role of Critical Minerals in Clean Energy Transitions,” International Energy Agency (IEA), May 2021.
An investor should consider the investment objectives, risks, charges, and expenses carefully before investing. To obtain a Sprott Energy Transition Materials ETF Statutory Prospectus, which contains this and other information, visit https://sprottetfs.com/setm/prospectus, contact your financial professional or call 888.622.1813. Read the Prospectus carefully before investing.
The Fund is not suitable for all investors. 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. An investment in the Fund involves a substantial degree of risk. The Funds are con-diversified and can invest a more significant portion of assets in securities of individual issuers than a diversified fund. As a result, changes in a single investment's market value could cause more significant share price fluctuation than in a diversified fund.
Shares are not individually redeemable. Investors buy and sell shares of the Sprott Energy Transition Materials 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.
The Sprott Energy Transition Materials ETF seeks to provide investment results that, before fees and expenses, generally correspond to the total return performance of the Nasdaq Sprott Energy Transition Materials™ Index (NSETM™).
Nasdaq®, Nasdaq Sprott Energy Transition Materials™ Index, and NSETM™ 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 LP is the investment advisor to the Sprott Energy Transition Materials ETF. ALPS Distributors, Inc. is the Distributor for Sprott Energy Transition Materials ETF and is a registered broker-dealer and FINRA Member.
You can purchase and trade shares of Sprott ETFs directly through your online brokerage firm; these firms may include:
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