HanETF and Sprott Asset Management on Thursday jointly launched an exchange-traded fund in Europe that tracks copper miners with a lower carbon footprint, in what will be their third fund to be unveiled together in the last two years.
Sprott Asset Management CEO John Ciampaglia noted the use of a greenhouse gas emission screen as the ETF’s most innovative feature.
According to Ciampaglia, the fund relies on a model that helps evaluate the amount of carbon dioxide produced in a miner’s supply chain for every pound of copper it produces and then excludes firms that perform worse in terms of their carbon footprint.
“Copper will be the backbone of the energy transition,” Ciampaglia also said, pointing to its use in electric vehicles and solar industry.
The Sprott Copper Miners ESG-Screened UCITS ETF will track the Nasdaq Sprott Copper Miners ESG Screened Index, with Ivanhoe Mines and Antofagasta among the ETF’s biggest holdings.
It is also Europe’s only Article 8 copper miners ETF under the Sustainable Finance Disclosure Regulation (SFDR), which mandates how asset managers should disclose ESG factors, the firms said.
Although funds that incorporate environmental, social and governance (ESG) goals into their mandate have struggled this year amid a sharp rise in interest rates and economic uncertainty, their performance in Europe has been better than in the United States.
“In the US, it’s fair to say that ESG is highly political and it has been somewhat weaponized … in Europe, things are more progressive, there is a much more accepted focus on ESG, as well as energy transition,” Ciampaglia said.
Ciampaglia and HanETF’s head of research Tom Bailey added that they decided to launch the fund following conversations with a large institutional investor in the DACH region (Germany, Austria and Switzerland).
The ETF has an expense ratio of 0.59%.
Sprott Uranium Miners UCITS ETF and Sprott Energy Transition Materials UCITS ETF are the other two ETFs jointly launched by the asset managers.
(By Bansari Mayur Kamdar)