Critical metals ETFs are giving advisors targeted exposure to uranium, lithium, copper, and rare earths. These materials sit behind electric vehicles, defense systems, clean energy infrastructure, and AI data centers. At an InvestmentNews roundtable, three ETF executives outlined distinct approaches to the sector. Steve Schoffstall of Sprott focused on supply-chain diversification outside China. Matt Bromberg of Wedbush Fund Advisers described research-driven index construction built around proprietary analyst output. Charles Champagne of Allianz Investment Management explained how buffered ETFs exchange upside participation for defined downside protection.
Uranium, lithium, copper, and rare earths go into EV batteries, defense systems, clean energy grids, and the data centers that run AI models. Governments designate these materials as "critical minerals" or "critical materials" to flag both their economic weight and their exposure to supply disruption. That designation matters because it unlocks policy tools that are otherwise unavailable, including stockpiling, direct financing, accelerated permitting, equity stakes in producers, and in some cases price floors. Price floors in particular give producers the long-term certainty needed to commit capital to projects that can take 15 years from discovery to production. Steve Schoffstall, managing partner and head of ETFs at Sprott, placed the investment thesis in geographic terms: "It's really more about investing outside of China as opposed to just investing in the United States."
China controls roughly 69 percent of global rare earth mining, according to Schoffstall, and more than 90 percent of downstream processing in some categories. The strategic risk became visible in 2009, when Beijing cut off rare earth shipments to Japan and prices spiked roughly 25-fold. Western producers began planning new capacity, but China then flooded the market with cheap supply, prices collapsed, and most new projects were shelved. The result was approximately 15 years in which investment in the sector largely stalled. What changed is the policy environment. Governments are now deploying the full toolkit to encourage new supply outside Chinese jurisdiction, including supply-chain agreements the U.S. has already signed with Australia and Japan, with an EU agreement reported to be near completion. Schoffstall argued that shift gives the investment case its current structural grounding.
Wedbush Fund Advisers built two products around the research output of its own equity team rather than rules-based factor screening. Its IVES ticker, the AI Revolution ETF, tracks a passive index constructed from analysis by Wedbush technology analyst Dan Ives. A second product, IVEP, focuses on AI power and infrastructure. The index is passive in the regulatory sense but reflects analyst judgment rather than market-capitalization weighting. Matt Bromberg, chief operating officer and general counsel at Wedbush Fund Advisers, said the structure deliberately translates the firm's intellectual property into something advisors and institutions could actually buy. "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.
Bromberg was direct about Wedbush's competitive position. "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 lets smaller issuers identify structural themes early and build targeted products before the largest complexes commit resources. Wedbush's approach centers on packaging proprietary research as an index, a format that would require large issuers to restructure internal workflows built around scale. Bromberg argued that the more interesting competition in the ETF industry has shifted away from cost toward the quality of the view behind the index. Specificity, not fee compression, is now the differentiator that boutique shops can credibly offer.
Bromberg said assets under management remain the ultimate validation but function as a lagging indicator. The firm's own internal benchmark, he said, is whether it is "moving away from rear-viewing index construction toward more active indexing and research-driven indexing." That framing treats the quality and timeliness of the underlying view as the primary variable, not the fee or fund size. He also pointed to a thematic ETF market that has matured enough to reward specificity. "Thematics are now 10, 15 years into their development," Bromberg said. "And you're seeing much more precision around offerings." Advisors seeking differentiated tools are now better positioned to evaluate that precision than they were a decade ago, when the thematic category was still establishing its track record.
Charles Champagne, head of ETF strategy at Allianz Investment Management, described a structure that has grown from a niche product into a recognized portfolio tool over roughly seven years. Investors exchange a portion of their upside for a defined level of loss protection over an outcome period. Champagne offered a concrete illustration: a 20 percent buffer on the S&P 500, with a 12 percent upside cap over one year. If the index falls 15 percent, the ETF is flat before fees. A 25 percent decline produces a 5 percent loss. Returns track the index one-for-one up to the cap and no further. "There's never a free lunch in this world," Champagne said, capturing the trade-off in plain terms. Buffered products are now available on the QQQ, EFA, and small-cap indexes, with outcome periods from three months to a year.
Champagne connected recent demand for buffered ETFs to the breakdown of the traditional stock-bond correlation. For decades, advisors relied on that negative correlation to cushion equity drawdowns. The 2022 period, when both stocks and bonds posted sharp declines, marked the inflection point. "This is really where buffered ETFs proved that they perform as designed," Champagne said. He cited tariff-driven volatility and escalation involving Iran as additional periods when the structure delivered. Advisors are now using these products in three distinct roles: as bond replacements in the defensive sleeve, as hedges around a core U.S. large-cap position, and as transition vehicles for clients holding excess cash who want equity re-entry without full market risk. That range of applications reflects a category that has moved beyond novelty into everyday portfolio construction.