Sprott Asset Management has introduced a new global equities ETF in Europe providing pure-play, ESG-screened exposure to copper mining companies.
Demand for copper is being driven by the clean energy transition.
Brought to market in partnership with London-based white-label ETF platform HANetf, the Sprott Copper Miners ESG-Screened UCITS ETF has been listed on London Stock Exchange in US dollars (Ticker: CPPR LN) and pound sterling (COPP LN) as well as on Xetra (ASWD GY) and Borsa Italiano (COPR IM) in euros.
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.
John Ciampaglia, CEO of Sprott Asset Management, commented: “Despite the size of the copper metal market and growing investor interest in the metal as the energy transition gains momentum, it’s been challenging for investors to gain targeted exposure to copper miners. We’re pleased to be able to offer a solution through our continuing work with HANetf. CPPR has been designed to focus primarily on mining companies that derive the majority of their revenue or assets from copper.”
Hector McNeil, Co-Founder and Co-CEO of HANetf, added: “We are delighted to be launching the Sprott Copper Miners ESG-Screened UCITS ETF with Sprott Asset Management. The ETF is the first opportunity for European investors to get ESG-screened copper exposure, and we believe this is timely given the role copper will play in the global energy transition. Sprott are a great partner and experts in the metals and mining space. CPPR is a highly innovative ETF which, similar to others in the HANetf range, look to make a brown industry greener.”
Methodology
The ETF tracks the Nasdaq Sprott Copper Miners ESG Screened 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”.
The index incorporates an ESG review by Skarn Associates, a controversy review by Sustainalytics, and additional screens for compliance with the United Nations Global Compact.
Constituents that remain after the ESG screen 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.
The ETF comes with an expense ratio of 0.59% and is classified as an Article 8 product under the European Union’s Sustainable Finance Disclosure Regulation (SFDR).
CPPR is the third ETF brought to market that HANetf and Sprott Asset Management have launched together, following the Sprott Uranium Miners UCITS ETF (URNM LN) and Sprott Energy Transition Materials UCITS ETF (SETM LN). URNM targets mining companies focused on the uranium industry, while SETM provides exposure to companies providing materials considered critical for the clean energy transition such as rare earths, silver, copper, lithium, nickel, manganese, cobalt, and graphite.