HANetf has announced that it has launched Sprott Energy Transition Materials UCITS ETF (SETM) on London Stock Exchange.
The firm writes that SETM, which tracks the Nasdaq Sprott Energy Transition Materials Ex-Uranium Index, seeks to provide exposure to the critical materials that will be vital to the global clean energy transition. These materials can be broadly categorised by their role in this transition:
1) Clean Energy Generation: makes use of rare earths and silver
2) Clean Energy Transmission: relies on copper
3) Clean Energy Storage: relies on lithium, nickel, manganese, cobalt and graphite.
The firm writes that there is, therefore, an urgent need to move from a carbon-intensive economy to a metals-intensive one.
“As global governments continue to commit to net-zero pledges, we expect the demand for these materials to surge. Since March 2022, global government spending to support clean energy increased by over USD500 billion. However, the IEA suggests that clean energy investments may need to reach a yearly average of USD4.2 trillion between 2026 and 2030 to meet net-zero targets.
“Clean energy infrastructure must expand, and we believe companies that are upstream in the supply chain will benefit from the increased investment in the critical minerals necessary for this transition.”
SETM is the second ETF launched in partnership with Sprott Asset Management, following the launch of Sprott Uranium Miners UCITS ETF (URNM) in May 2022. The uranium miners ETF recently surpassed USD55 million in AUM, less than nine months after its listing. Sprott recently launched the sister ETF to SETM in the US, which HANetf has adapted as a UCITS version for the European market.
John Ciampaglia, CEO of Sprott Asset Management, says: “2022 was a global wake-up call regarding the importance of energy transition and security.
“Certain critical minerals serve as raw materials that are required to meet the growing need for low-carbon energy, increased electrification, and the transition to electric vehicles. Due to years of underinvestment, demand for many energy transition materials now outstrips supply. We believe mining companies focused on energy transition minerals are well positioned to benefit from the significant investments that will be required over the coming decades.”
Hector McNeil, Founder and co-CEO of HANetf, says: “The clean energy revolution means we are moving from a carbon-intensive economy to a metals-intensive one. Whether it’s for solar panels or the batteries that power electric cars, a decarbonised world means more demand for critical materials. This presents a potential investment opportunity.
We are delighted to once again be partnering with Sprott Asset Management to create a highly innovative ETF to capture this theme. Sprott are world leaders in material and mining products.”
