- Canadian investors are turning to ETFs as an accessible way to gain exposure to critical minerals needed for clean energy and electrification.
- Recent deals — including Qatar’s US$500M investment in Ivanhoe Mines and Canada’s supply chain pact with Germany — highlight growing global momentum.
- While ETFs reduce single-stock risk, they remain exposed to commodity cycles, concentration risks and environmental hurdles.
Earlier this month, Stockhouse covered the critical minerals and clean tech boom powering Canada’s junior miners. But for many investors, picking individual mining stocks can feel speculative — high reward, high risk.
A growing number are instead choosing exchange-traded funds (ETFs) to tap into the same megatrend, reflecting a surge in demand for commodities essential to electrification and digital infrastructure.
This article is a journalistic opinion piece which has been written based on independent research. It is intended to inform investors and should not be taken as a recommendation or financial advice.
What are ETFs?
Exchange-traded funds (ETFs) are investment products that trade on stock exchanges, much like individual stocks. Instead of buying a single company, investors purchase a basket of securities grouped by a theme, sector or index.
In the case of critical minerals, these funds package multiple companies involved in lithium, copper, nickel, uranium and rare earths, giving retail investors diversified exposure to one of the world’s most strategically important sectors.
Policy and Geopolitics
The appeal of critical minerals is rooted in long-term demand. According to the Government of Canada, 31 minerals are now designated “critical” for their role in batteries, electronics and renewable energy systems — backed by a C$3.8 billion Critical Minerals Strategy.
Partnerships like the Canada-Germany agreement signed in August 2025 are designed to link mining, refining and processing capabilities across borders. While in Europe, the first rare earth magnet plant has come online to reduce reliance on Chinese exports.
Critical minerals ETFs leading the charge in Canada
Several ETFs have emerged as vehicles for investors wanting to gain exposure without betting on single explorers or producers:
- The Sprott Critical Materials ETF (NDAQ:SETM) provides “pure-play” exposure to companies focused on uranium, copper, lithium and rare earths. Its share price has nearly doubled in value over the past six months, from about US$12 in April 2025 to more than US$24 in September 2025.
- BMO Equal Weight Global Base Metals Hedged to CAD ETF (TSX:ZMT) is a diversified basket of base metals companies, with currency risk hedged for Canadian investors. After plunging below C$50 in April, the fund has rallied nearly 80 per cent to trade at C$90 in September, reflecting renewed investor confidence in base metals.
- The VanEck Rare Earth & Strategic Metals ETF (ARCA:REMX) holds a global mix of producers and refiners. Shares gained 65 per cent over six months, from US$39.53 at the start of April 2025 to US$65.08 at the point of writing.
These ETFs are marketed to investors seeking to capture the upside of global electrification and clean energy adoption without taking on the risks of single-stock exposure.
Global capital flows into Canadian miners
Institutional activity, such as the European rare earth magnet plant project, underscores why ETFs are drawing interest.
In September, Qatar’s sovereign wealth fund invested US$500 million in Ivanhoe Mines Ltd (TSX:IVN), one of Canada’s largest copper producers. Meanwhile, Teck Resources (TSX:TECK.A) announced plans to boost germanium production, a critical input for semiconductors.
For retail investors, ETFs offer a way to align with these macro trends without needing to parse each company’s balance sheet or drill results.
Performance trends and risks with critical minerals ETFs
2025 has seen rising fund flows into critical minerals ETFs, according to ETF Database, with Sprott’s SETM recording more than US$49 million in net inflows over the past year.
Key drivers include:
- Uranium prices rising as small modular reactor projects advance.
- Copper demand linked to electrification and grid infrastructure.
- Nickel and lithium volatility driven by battery adoption and evolving EV chemistries.
While ETFs reduce stock-specific risk, investors should be mindful of:
- Commodity cycles: Metals remain volatile and prone to macro swings.
- Concentration risks: Some ETFs hold relatively few companies, limiting diversification.
- Environmental and social hurdles: Permitting delays and Indigenous consultations can stall projects.
For retail portfolios, financial planners caution against over-allocation to niche thematic funds.
ETFs are becoming the entry point of choice for Canadians who want to participate in the critical minerals boom without speculating on early-stage miners.
While junior explorers may deliver outsized gains — as highlighted in Stockhouse’s previous coverage — ETFs provide a broader way to capture the same megatrend.
With government backing, international cooperation, and billions in new investment, investor attention on these funds is only likely to grow.
But as with any commodity-linked investment, the path will not be smooth. Long-term fundamentals point to electrification, clean tech and supply chain security driving demand — yet the volatility of the sector means timing and allocation remain crucial.
At market close on September 24, Ivanhoe Mines Ltd. (TSX:IVN) rose 9.54 per cent to C$14.35, while Teck Resources Class A shares (TSX:TECK.A) finished 4.67 per cent higher at C$56.
Join the discussion: Find out what investors are saying about ETFs and critical minerals on Stockhouse’s stock forums and message boards.
Stockhouse does not provide investment advice or recommendations. All investment decisions should be made based on your own research and consultation with a registered investment professional. The issuer is solely responsible for the accuracy of the information contained herein.
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