As mentioned earlier, China's actions woke up the U.S. and other developing countries to their lack of control over critical minerals. As a result, President Donald Trump and Australian Prime Minister Anthony Albanese recently signed a Critical Minerals Framework, representing a significant step toward the energy and mineral leadership goals of both countries. Completed after five months of talks, the agreement seeks to accelerate the development of robust, allied mineral supply chains and reduce dependence on rival nations. The G7 nations have also announced a critical minerals production alliance, with Canada recently announcing the first round of investments.

Another example of the U.S.’s assertive approach to securing critical minerals access is its recently announced public-private partnership with MP Materials Corp. (NYSE: MP)*, a company that produces and markets rare-earth specialty materials. Through this strategic investment, the U.S. government, via the Department of Defense, will hold a 15% ownership stake in the company.

With the growing demand for critical minerals, resource nationalism and supply-chain security are becoming major themes across the global economic landscape. The U.S., EU, and Japan have all passed or proposed “critical minerals” strategies to reduce dependence on China for rare earths, graphite, manganese, and other strategic inputs. These policies often involve subsidies, domestic mining incentives, and stockpiling - all of which can support the companies involved in critical minerals exploration, refinement, and distribution. While energy development and storage are a top-of-mind use case for critical minerals, governments want secure supply chains for these minerals, as they are used in defense, aerospace, and advanced manufacturing. Furthermore, rare earths, such as neodymium (Nd), dysprosium (Dy), and praseodymium (Pr) and other specialty metals are essential for jet engines, missiles, radar, and precision optics - as well as for electric vehicle engines.

Investing in Critical Materials with Sprott

The Sprott Critical Materials ETF (NASDAQ: SETM) aims to capitalize on the growing demand for critical minerals and their integral role in the global economy.

Rather than picking one metal or one company, SETM offers diversified exposure to many materials companies (uranium, copper, lithium, rare earths, etc.). This approach facilitates capturing broad market opportunities and reduces single-commodity risk to some degree. Given that many of these critical materials could face supply constraints, due to long lead times for new mines/refineries or geopolitical intervention, this could result in upward pressure on prices, benefiting companies involved upstream.

SETM gives investors a “pure-play” diversified equity exposure to the upstream miners/explorers/developers/refiners of materials deemed critical to meeting the world’s growing energy demands. These critical minerals, metals, and raw materials include uranium, copper, lithium, nickel, cobalt, graphite, manganese, rare earths and silver.

SETM seeks to provide investment results that, before fees and expenses, correspond generally to the total return performance of the Nasdaq Sprott Critical Materials™ Index (NSETM™). The Index is designed to track the performance of a selection of global securities in the critical materials industry.

*As of 12/2/25, MP Materials Corp. is a current SETM holding with a weight of 7.21%. Please visit https://sprottetfs.com/setm-sprott-critical-materials-etf/ for a complete list of all SETM holdings, which are subject to change.

Click here to learn more about SETM.

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This post contains sponsored content. This content is for informational purposes only and not intended to be investing advice.

An investor should consider the investment objectives, risks, charges and expenses carefully before investing. To obtain a Sprott Critical Materials ETF Statutory Prospectus, which contains this and other information, visit https://sprottetfs.com/setm/prospectus, contact your financial professional or call 1.888.622.1813. Read the Prospectus carefully before investing. 

One cannot invest directly in an index.

Investors in the Sprott Critical Materials ETF (the Fund) should be willing to accept a high degree of volatility in the price of the Fund’s shares and the possibility of significant losses. An investment in the Fund involves a substantial degree of risk. The Fund is not suitable for all investors. The Fund is non-diversified and can invest a more significant portion of assets in securities of individual issuers than a diversified fund. As a result, changes in a single investment’s market value could cause more significant share price fluctuation than in a diversified fund. 

Shares are not individually redeemable. Investors buy and sell shares of the Sprott Critical Materials ETF on a secondary market. Only authorized participants may trade directly with the Fund, typically in blocks of 10,000 shares. 

Funds that emphasize investments in small/mid-cap companies will generally experience greater price volatility. Diversification does not eliminate the risk of investment losses. ETFs are considered to have continuous liquidity because they allow an individual to trade throughout the day. A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when Fund shares are held in a taxable account. These costs, which are not reflected in annual Fund operating expenses, affect the Fund’s performance. 

Sprott Asset Management USA, Inc. is the Investment Adviser to the Sprott Critical Materials ETF. ALPS Distributors, Inc. is the Distributor for the Sprott ETFs and is a registered broker-dealer and FINRA Member. ALPS Distributors, Inc. is not affiliated with Sprott Asset Management USA, Inc. 

This content was originally published on Benzinga. Read further disclosures here.