Sprott Expands ETF Lineup, Bets Big On Undervalued Miners

Sprott Asset Management launched a new ETF, or exchange-traded fund, that primarily invests in companies engaged in various aspects of the gold and silver industry.

The Sprott Active Gold & Silver Miners ETF GBUG has a net expense ratio of 89 basis points. Gold companies take up 75.49% of the allocation while 8.25% is dedicated to silver.

The fund targets value-based investing with undervalued companies having strong fundamentals and growth potential.

Also Read: Bullion Boom: Gold ETFs Gain As Geopolitical Storm Fuels Surge

The fund doesn't shy away from international exposure either. It invests in major mining regions such as Canada (75.54%), and Australia (11.89%). Additionally, GBUG may hold positions in emerging market companies, tapping into growth opportunities across the globe. The ETF focuses on small (27.7%) and mid-cap (52.1%) companies mainly.

"Given the operational complexities of mining, investors may benefit from an active ETF strategy focused on long-term business fundamentals and growth potential,” Sprott CEO Whitney George said.

George also highlighted the team's deep industry knowledge, pointing out that they conduct over 200 management meetings annually and make regular site visits to mining operations worldwide.

GBUG joins Sprott's growing list of precious metals ETFs, bringing its total number to four. In January, the company introduced the Sprott Silver Miners & Physical Silver ETF SLVR.

The ETF launch comes at a time when gold prices are reaching heady highs as investors flocked to the ultimate safe-haven asset amid rising geopolitical tensions and economic uncertainty. Gold climbed to fresh highs early on Feb. 20 spot bullion hit $2,954.84 per ounce briefly.

"Gold and silver mining stocks have historically been correlated to bullion, but in recent years, they've lagged the price of the physical metals," noted John Hathaway, CFA, Managing Partner at Sprott and Senior Portfolio Manager, Sprott Asset Management. "Gold and silver mining stocks could offer significant catch-up potential," he added.

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