Sprott Asset Management has introduced a new global equities ETF providing pure-play exposure to copper mining companies from across the market cap spectrum.
Copper is a key metal used across clean energy technologies.
The Sprott Copper Miners ETF (COPP US) has been listed on Nasdaq with an expense ratio of 0.65%.
Copper is the third-largest metals market by US dollar value and demand is expected to rise due to its essential role in the clean energy transition – the metal is used in power grids, across the machinery required for clean energy generation (such as wind turbines), and in large quantities in the manufacture of electric vehicles.
Copper’s high conductivity, tensile strength, and corrosion resistance make it vital to electricity distribution and transmission.
COPP represents Sprott’s second copper mining fund, joining the Sprott Junior Copper Miners ETF (COPJ US), which launched in February 2023 and specifically targets the small-cap segment of the global copper mining industry. COPJ has an expense ratio of 0.75%.
John Ciampaglia, CEO of Sprott Asset Management, commented: “Global commitments to meet net-zero emissions by 2050 are reliant upon copper-intensive electrification initiatives, such as expanding power grids, building clean energy infrastructure like wind turbines and solar panels, and manufacturing more electric vehicles.
“Despite growing investor interest in copper as the energy transition gains momentum, it’s been challenging for investors to gain targeted exposure to copper miners. We’re pleased to offer a focused opportunity to invest in copper miners through this ETF.”
Methodology
The ETF tracks the Nasdaq Sprott Copper Miners Index which selects its constituents from a universe of developed and emerging market stocks with market capitalizations above $200 million and average daily trading volumes greater than $500,000.
The methodology screens for ‘producers’, ‘developers’, and ‘explorers’ of copper. Producers are defined as companies that extract copper and that have a significant percentage of their revenue tied to the sale of copper; developers are companies that have the majority of their operations related to preparing mines for copper production; and explorers are companies that have the majority of their operations related to searching for copper.
Copper mining companies must have thematic relevance scores of at least 25% to be eligible for inclusion in the index. Firms with thematic relevance scores above 50% are classified as “Group 1” while securities with thematic relevance scores between 25% and 50% are classified as “Group 2”.
Constituents are weighted by float-adjusted market capitalization subject to a single security cap of 4.75% and an aggregate cap of 15% on all Group 2 securities. The index is reconstituted and rebalanced on a semi-annual basis.
COPP belongs to Sprott’s suite of energy transition ETFs, dedicated to capitalizing on the essential materials required for the generation, transmission, and storage of renewable energy. This suite includes ETFs focused on mining companies involved in lithium, nickel, and uranium, as well as a fund providing diversified exposure across miners of various energy transition materials.