Sprott debuts silver miners ETF
Sprott Asset Management has introduced the world’s first ETF providing dedicated exposure to both silver miners and physical silver.
The Sprott Silver Miners & Physical Silver ETF (SLVR US) has been listed on Nasdaq with an expense ratio of 0.65%.
Silver is a versatile raw material, renowned for its status as a precious metal and its critical industrial applications, particularly in electrical and clean energy technologies. The metal plays a pivotal role in the global transition from fossil fuels to cleaner energy sources.
John Ciampaglia, CEO of Sprott Asset Management, highlighted the metal’s investment potential, stating: “Silver is one of the world’s best-known precious metals, and we believe it’s positioned to perform well in today’s market. In addition, demand for silver is growing in applications ranging from clean technology and solar energy to the automotive and healthcare industries.
“We believe silver and its miners have significant investment potential, as silver is both a precious metal and an industrial metal critical to new energy. With our specialized expertise in precious metals and critical materials, we’re pleased to offer a focused opportunity to invest in silver miners and physical silver through this ETF.”
Methodology
The fund is linked to the Nasdaq Sprott Silver Miners Index, which tracks companies involved in the silver industry. Eligible firms are sourced from both developed and emerging markets, excluding China A-shares, and must meet a minimum market capitalization threshold of $30 million.
Companies are required to derive at least 25% of their gross revenue from silver-related activities, such as production, development, or exploration.
Eligible companies are categorized into two groups based on their revenue exposure to silver. Group 1 comprises firms with more than 50% of revenue derived from silver-related activities, while Group 2 includes those with 25% to 50% revenue exposure.
The index undergoes semi-annual reconstitution and rebalancing. At each rebalancing, 17.5% of the index weight is allocated to physical silver, with the remaining weight distributed among eligible silver mining securities. These constituents are weighted by float-adjusted market capitalization, with adjustments for revenue exposure in the case of Group 2 securities. The total weight of Group 2 companies is also capped at 15%, and no single constituent can exceed a weight of 4.75%.
The launch of SLVR expands Sprott’s portfolio of ETFs focused on precious metals, including the flagship Sprott Gold Miners ETF (SGDM US) and Sprott Junior Gold Miners ETF (SGDJ US), as well as a range of funds offering pure-play exposure to critical materials such as uranium, copper, lithium, and nickel miners.
Source: https://www.etfstrategy.com/