Advisor Perspective: How Gold, Silver, and Critical Materials Shaped Portfolios in 2025

Yeah, it's great to see you, Ed.

Thanks for coming in. >> Yeah, thanks for having me.

I'm looking forward to our conversation today. >> As you're well aware, 2025 has been a great year for a lot of the metals markets.

Uh, looking at Bloomberg data, uh, if you dive in and look at how ETFs are performing, uh, over the top 4,000 ETFs, 16 out of 17 are actually miners of precious metals or critical materials.

So, from that standpoint, we've seen a lot of, uh, interest, not only from investors. it'd be great to spend some time to talk a little bit about what you're seeing uh from an advisor perspective. >> Sure.

So advisers are certainly taking notice.

We've always had our core advisors that I guess in the past they call them gold bugs and even silver bugs for that matter.

But now we're seeing more advisers start to look at this space in a real way.

As more and more investors are looking for alternative strategies, gold is stepping into that into that spot.

You know, the old 6040 model tends to be broken.

If you talk about, you know, advisers and you talk about big banks, Jamie Diamond saying it's really 60 2020 now with 20% being alternatives and in there is gold.

More advisers starting to embrace that as well.

So steel feels like early days as far as advisers looking at gold as an alternative asset and not just as a currency.

Um, and as more investors look to diversify their portfolio, gold is definitely taking uh taking charge on that.

Yeah, gold miners, you know, as you bring up, gold is one of those sectors that's really been on the outside looking in for the better part of 15 years.

And um now they're among the best performing sectors that we've seen.

Uh but despite of that, we're we're still seeing about four half billion dollars in outflows in the largest gold mining ETFs.

What's been the reaction uh when you talk to clients around gold miners and how are they viewing those as part of their portfolio? >> The gold miners are really a hot topic right now.

What's interesting about gold miners and what you just mentioned about the outflows is that many of the advisers and investors started buying the miners 2009 2010 and the market peaked in 2011.

So there's a core group of investors that are really just getting back to even or finally back in the money.

And so they're realizing that and saying hey this was a long time to get back to even I'm going to move on to something else.

Having said that though, with gold and silver doing so well and the miners doing so so well with some of the best balance sheets out there, it's not just the returns.

They have better dividend yields than the S&P 500.

The return on invested capital is more attractive.

They're less leveraged than many of the companies out there today.

And so there's a new wave of investors starting to pay attention to this.

So I think we're getting kind of out with the old and I mean old and old capital's coming out. they've broken even, but new capital is starting to show up and starting to to participate in the space.

So, like gold and silver again feel like it's kind of the early days as far as advisers looking at mining stocks as a unique way to add risk on to their portfolio.

And I think it's worth also mentioning that so often people think, well, if I'm going to invest in gold or I'm going to invest in silver, why not just do the minors because I can get torque to the trade?

And I always like to say the physical market and the equity market are very different investments.

The physical market is still more of a riskoff diversification investment and the miners are more of a risk-on opportunistic investment.

And so that's how you really need to think about it.

And as we work with more and more adviserss, we really help them go through that allocation and think about how much they should have in the physical market and does it make sense or is it appropriate for their clients to start looking at the minors as well.

The answer is starting to be more and more yes, it is.

And advisers are starting to look at minors today.

It's a great point you bring up about those investors that have been invested in miners for so long and and um you know moving out of the gold trade.

Uh we do see that new money starting to come in.

We we've earlier this year launched the uh GBUG which is our sproat active gold and silver mining ETF.

That's actually gotten a lot of traction.

Um it's the only active strategy out there on the market as it relates to gold mining.

Um, you know, with that, you know, kind of the value proposition there is we tend to see a lot of dispersion returns between uh different companies within the gold mining sector and and active strategy could help uh investors outperform, you know, the broader gold equity market when you're having these conversations with investors.

How do you choose between gold and passive and active strategies?

What's how are advisers thinking about those options? >> Yeah, you said a key word there, active.

You know, Sprat's had a factor-based suite of ETFs for a while.

We've got um a senior mining ETF and we have a junior mining ETF, but to your point, GBug is something that's newer.

And we're finding more and more adv investors are looking at the active side of this of this equation.

You know, as you go down to market cap, as you go into corners of the room like mining stocks, advisors want to have a more hands-on approach to the allocation of the individual names in those portfolios.

So while a uh an a passive strategy or even a factor-based strategy may be appropriate for a core allocation for an adviser who is really looking to go into this particularly for the first time they want that additional umbrella of an active manager going out there and looking at the best names out there.

So we're starting to see as more investors start to think about miners in some cases for the very first time they are leaning more towards that active approach. is one of the few spaces out there today, particularly in the world of ETFs, where active management is starting to gain real traction. >> Yeah.

Related to gold is silver miners.

Obviously, you can't talk about gold without talking about silver.

Um, you know, over the last several years, I think many in the market have been waiting for this catch-up trade to happen in silver.

And, uh, we're actually starting to see that now.

Uh, physical silver's outperformed physical gold now by about 50% year to date.

Uh, so very strong um, uh, performance that we're seeing out of silver.

It's also a little bit more unique than what we see out of gold where gold is that that precious metals allocation.

Silver is kind of a dual metal where it has not only precious metals allocation but it also has about 60% of demand is actually coming from industrial uses.

And you know it's mined differently.

It's not uh most miners aren't going out and mining silver specifically.

It's a byproduct in many cases.

Um, with these different characteristics, how should investors be thinking about allocations to silver and silver miners in relation to their overall portfolio? >> Silver is a really fascinating uh metal today because when you think about the history of gold and silver together, most advisers would talk about the gold to silver ratio.

How many ounces of silver do I have to have to buy an ounce of gold?

And that was always kind of in lock step with each other.

Silver's really stepping out of gold shadow today. you know, gold is still truly a monetary metal where silver, as you mentioned, is going from being a maybe a lesser monetary metal to a true industrial metal.

It's getting consumed and yes, it's still a precious metal, but more and more of his consumption is going on the industrial side of things.

So, in many cases, advisers who are looking at precious metals for the first time, they're able to embrace the silver story a little more than they can the or are willing to embrace the gold story.

The one knock I hear all the time from advisers about gold is it doesn't do anything.

Doesn't pay a dividend.

It doesn't have any purpose outside of backstopping maybe paper currencies and so forth.

Well, this move of silver stepping out of gold shadowing going into the industrial application side.

Advisers can get their mind around that.

Say, okay, I see the purpose behind silver.

I can convey that to my clients.

We understand how that works and how that looks.

And when you're starting to see the, you know, the the bid for silver get higher and higher.

And as you mentioned, it's over $60 an ounce today.

It's doubled what gold has done yearto date from a performance pattern standpoint.

We think that's going to continue as the easy stuff's largely been had.

It's being consumed at a higher rate and things like solar panels and camera technologies and all the other things that silver is being used for is continuing to grow.

We really like the silver story today. >> Yeah, silver is a great segue into critical materials because countries are increasingly looking at silver as a critical material. um when you look at the options that are available to investors, you know, within the last couple years, we've launched a number of ETFs that provide individual exposure to mining companies.

So, for example, if you want to uh access uranium miners, copper miners, lithium, nickel, and so on.

Um, one of the funds that has done really well, and I know it's one of your favorite funds, is our Sprat Critical Materials ETF, ticker SETM.

Uh, this is a fund that gives broad-based exposure to pure play mining companies of up to nine different critical materials.

Um, I know you've had a lot of conversations uh as you're out in the field.

What's drawing advisers to SCTM? >> You're asking me about my favorite child right now.

Um, SCTM is a really cool ETF because advisers understand the value of having some uranium, having some copper, having some battery metals in there that we have a full litany of different battery metal solutions out there as well.

The problem advisors face is this is one in many themes they're trying to allocate capital to.

So in many times I hear them say why I have one line item on my balance sheet to take advantage of the energy transition or the energy addition movement that we're having out there.

How do I profit from that?

So many of our advisers investors have participated as a consumer, right? they they're getting electricity through solar panels or maybe they're buying an electric car, maybe they bought their first Tesla, but they haven't really participated as an investor.

And so our whole suite of ETFs are really allowing investors to do that.

And what's really cool about SETM is that it gives you exposure approximately to a third of the creation of energy, which is predominantly through uranium for nuclear and silver for solar.

There is some rare earth in there as well, but those are that's really your exposure on the creation side.

Then you have the movement or transmission of energy which is predominantly copper.

Then you have the storage of energy which are all the different battery metals that we offer.

And so for an adviser they can say I have one ticket, one ETF, one line item and I'm giving the full package, the full exposure, the full experience to my client and really encapsulating everything that's happening in that space right now.

So yes, SCTM happens to be my favorite just because it's a very eloquent solution on how to participate in this space today. >> Yeah.

Again, you mentioned uh rare earth and SCTM.

That's a uh about a 15% allocation there.

We find that given the news we've seen around that, a lot of investors are gravitating to SCTM for that reason because it does allow them that broader based exposure um without having to pick winners and losers of each of the individual metals because they do all react differently.

They have different supply and demand dynamics.

So, it's been a a great story, I think.

And uh well, it was great having a chance to catch up with you today, Ed, and um I'm sure we'll be back on here in no time. >> Steve, this was fun.

Thank you for uh the questions you had today and and hopefully the advisers and investors that are watching this uh will learn a bit about who we are and what we're doing.