“It’s really more about investing outside of China as opposed to just investing in the United States”

Steve Schoffstall, Sprott

“It’s a unique structure, but I do think we’re the first of many to try to provide this research in an investable manner”

Matt Bromberg, Wedbush Fund Advisers

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Critical metals and the ETFs built around them

A new generation of funds is giving advisors targeted ways to express views on supply chains, analyst research, and downside protection inside the ETF wrapper

Read on

Steve Schoffstall

Sprott

Charles Champagne

Allianz Investment Management

Matt Bromberg

Wedbush Fund Advisers

Industry experts

URANIUM, LITHIUM, copper, and rare earths sit behind much of what is being built right now. They go into electric vehicle batteries, defense systems, clean-energy infrastructure, and the data centers that train and run artificial intelligence models. They are also concentrated in a small number of jurisdictions, which is why governments increasingly designate them “critical materials” or “critical minerals,” terms used to flag both their economic importance and their exposure to supply disruption. That designation matters because it changes what governments and private companies are able to do to expand supply. Stockpiling, direct financing, accelerated permitting, equity stakes in producers, and in some cases price floors are all now on the table. For investors, the question is how to gain exposure to a category that spans industries and commodities. Steve Schoffstall, managing partner and head of ETFs at Sprott, said the most common entry point is a diversified basket of pure-play miners, though more knowledgeable investors often prefer products focused on a single commodity such as uranium or rare earths.

Schoffstall was one of three ETF executives who spoke at a recent InvestmentNews roundtable, alongside Charles Champagne, head of ETF strategy at Allianz Investment Management, and Matt Bromberg, chief operating officer and general counsel at Wedbush Fund Advisers. Each described a way of using the ETF structure to deliver a more specific view than the broad market index funds that built the category. Why China sits at the center of the tradeThe case for the category turns on a specific dependency. China controls roughly 69 percent of global rare earth mining, according to Schoffstall, and more than 90 percent of downstream processing and refining in some categories. He traced the strategic significance of that concentration to a single episode in 2009, when Beijing cut off rare earth shipments to Japan. Prices spiked roughly 25-fold, and Western producers began to plan new capacity. China then flooded the market with cheap supply, prices collapsed, and most of the new projects were shelved. The result, in Schoffstall’s telling, was about 15 years in which investment in the sector largely stalled. What changed is the policy environment. Beyond the broad toolkit of stockpiling, financing, permitting, and equity stakes, Schoffstall pointed to price floors as the most consequential new lever. They give producers the long-term certainty needed to commit to projects that can take 15 years from discovery to production.

The frame, he emphasized, is not narrowly nationalistic. “It’s really more about investing outside of China as opposed to just investing in the United States,” he said. He pointed to recent supply chain agreements between the US and Australia and Japan, with a European Union agreement said to be near completion. Sprott’s own lineup reflects both approaches. Its Critical Materials ETF (SETM) holds pure-play miners, with at least 50 percent of revenue or assets tied to target metals, covering battery metals, copper, rare earths, silver, and uranium. Its

Rare Earths Ex-China ETF (REXC) launched in April, for investors who want a more targeted bet. Schoffstall also cautioned advisors evaluating thematic products. Many ETFs marketed as offering exposure to a particular metal hold only a small percentage of assets actually tied to that theme. In some cases, the figure is under 10 percent. The boutique playbook: speed, specificity, and branded researchWedbush is testing a different proposition: whether its own equity research can be packaged as an investable product. Bromberg was explicit that the firm’s competitive logic does not run through price or scale. “We’re not going to be able to compete as smaller sponsors with BlackRock and Vanguard on price or breadth,” he said. “But we can do innovative things more quickly.” That speed advantage, in his framing, is what allows smaller sponsors to identify structural themes early and build products around them before the largest issuers arrive. He also pointed to a maturing thematic market that rewards specificity. “Thematics are now 10, 15 years into their development,” Bromberg said. “And you’re seeing much more precision around offerings.”

The firm’s IVES ticker, the AI Revolution ETF, is a passive index fund with an underlying index built from research by Wedbush technology analyst Dan Ives. A second product, IVEP, focuses on AI power and infrastructure. The structure is unusual. The fund is passive in the regulatory sense, but the index it tracks is the output of analyst judgment, not rules-based screening of market capitalization or factor exposures. “It’s a unique structure, but I do think we’re the first of many to try to provide this research in an investable manner,” Bromberg said. He described the products as the result of a deliberate effort to translate the firm’s intellectual property

into a vehicle advisors and institutions could actually buy, with Wedbush’s equity research department supplying the underlying view and the ETF team supplying the wrapper. Asked how a boutique defines success against larger complexes, Bromberg said assets under management remain the ultimate validation but are a lagging indicator. The firm’s own measure, he said, is whether it is “moving away from rear-viewing index construction toward more active indexing and research-driven indexing.” The implication is that the more interesting competition in the ETF business has shifted to the quality of the view behind the index rather than the cost of replicating it. Engineering the downsideChampagne noted buffered ETFs have grown from a niche curiosity to a more established corner of the market over the past seven years. The structure is derivative-based but conceptually simple. Investors trade a portion of their upside for a defined level of downside protection.

He offered an illustration. An investor buys a 20 percent buffer on the S&P 500, with a 12 percent upside cap over a one-year outcome period. The investor is protected from the first 20 percent of losses. If the S&P falls 15 percent, the ETF is flat before fees. A 25 percent decline translates to a 5 percent loss. On the upside, returns track the index one-for-one to the 12 percent cap. “There’s never a free lunch in this world,” Champagne said. The category has expanded well beyond its original form. Buffered ETFs are now available on the QQQ, EFA, and small-cap indexes, with outcome periods running from three months to a year. The appeal, Champagne argued, is in part a response to the breakdown of traditional diversification. For decades, advisors relied on the negative correlation between stocks and bonds to cushion equity drawdowns. That correlation has become unreliable, with 2022 − when both stocks and bonds posted sharp declines − marking the inflection point. “And this is really where buffered ETFs proved that they perform as designed,” he said. Advisors are now deploying the products in three roles,

according to Champagne: as bond replacements in the defensive sleeve of a portfolio, as hedges around a core US large-cap equity position, and as transition vehicles for clients holding excess cash who want re-entry into equities without full market risk. He cited the “tariff tantrums” of the past year and the volatility around the recent escalation of the conflict involving Iran as periods when the products performed as designed. A new set of questions for advisorsFor most of the past two decades, an advisor could build a defensible portfolio by sitting on broad market exposure and letting low costs do the rest. The hard questions − about geopolitics, about correlation, about which corner of the economy mattered most − were ones the index answered on the client’s behalf.

Uranium, lithium, copper, and rare earths sit at the centre of AI, EV, defense, and energy-investment trends.

Why critical minerals have become a strategic asset

Sprott is a global asset manager focused on precious metals and critical materials investments. We are specialists. We believe our in-depth knowledge, experience, and relationships separate us from the generalists. Our investment strategies include exchange-listed products, managed equities, and private strategies. Sprott has offices in Toronto, New York, Connecticut, and California, and the company’s common shares are listed on the New York Stock Exchange and the Toronto Stock Exchange under the symbol (SII). For more information, please visit www.sprott.com.

Steve Schoffstall is managing partner, Sprott Inc. and head of ETFs, Sprott Asset Management USA, Inc. He joined Sprott Asset Management USA in April 2022 and has more than 18 years of experience in the ETF industry. In this role, Schoffstall leads the ETF product management team. Before joining Sprott, he was the senior ETF product manager at ProShare Advisors, and prior to that, he held varying positions at Vanguard. Schoffstall earned his bachelor of science in finance and MBA from Penn State University.

Sprott

Steve Schoffstall

Charles Champagne is head of ETF strategy at Allianz Investment Management, where he oversees strategic positioning, product development, investment analysis, and portfolio implementation to help clients achieve their investment goals. Previously, he served as head of portfolio insights and ETF analytics at SPDR ETFs (SSGA), where his team focused on custom portfolio analysis and investment analytics. Charles holds a bachelor’s degree in business management from Bridgewater State College and FINRA Series 7, 24, and 63 licenses.

Allianz Investment Management

Charles Champagne

Matthew (Matt) Bromberg is chief operating officer and general counsel at Wedbush Fund Advisers, LLC. He has extensive experience in ETFs and mutual funds, as well as separately managed accounts, robo-advisory, and wrap fee programs. In various in-house roles, Matt has been responsible for providing legal counsel relating to registration, day-to-day operation, regulation of investment advisors, and investment companies and related matters. Matt graduated from the University at Albany with a bachelor of arts in business administration and earned his JD from Brooklyn Law School, specializing in banking, corporate, finance, and securities law.

Wedbush Fund Advisers

Matt Bromberg

Published July 13, 2026

“There’s never a free lunch in this world”

Charles Champagne, Allianz Investment Management

China controls much of the world’s rare earth mining and processing capacity, making supply chains a geopolitical issue.

Governments are using stockpiles, financing programs, and accelerated permitting to encourage new production.

New partnerships between Western nations aim to reduce dependence on a single supplier.

Investors can gain exposure through diversified critical minerals funds or commodity-specific ETFs.

Critical minerals ETFs allow investors to express views on supply chains and resource security.

The ETF industry’s move toward precision

Research-driven ETFs package analyst conviction into investable indexes.

Buffered ETFs offer defined downside protection in exchange for capped upside participation.

Advisors are increasingly using ETFs for targeted portfolio outcomes rather than broad market exposure alone.

The shift reflects a growing demand for tools that help express specific economic, geopolitical, and risk-management views.

That’s becoming harder to do. The conversations among Schoffstall, Bromberg, and Champagne all circle the same observation, even if none of them say it directly: advisors are increasingly being asked to take positions on contested questions rather than abstain from them. Whether China’s grip on critical materials is loosening or hardening. Whether an analyst’s read on artificial intelligence is worth paying for. Whether the diversification logic that defined the 60/40 era still holds.

None of those questions has a settled answer. Taking a view on any of them means accepting concentration risk that a broad index would have spread across thousands of holdings. That trade-off used to sit outside the advisor’s job. It now sits inside it. The real shift the roundtable described is not in what ETFs look like but in how much judgment the advisor is expected to bring before choosing one.