Q1. Raw materials have been firmly back in the spotlight over the past year. What was the thinking behind launching the Future Raw Materials ETF when you did?

We were seeing a rare alignment of long-term forces that don’t come along very often. The clean‑energy transition is accelerating, digital infrastructure is expanding rapidly, and the demands of technologies like AI are becoming more tangible. Those trends all rely on a relatively small set of raw materials.

We launched our ETF to give investors a structured way to access that demand growth through equities, rather than trying to time commodity prices or individual supply shocks, which as we’ve seen can be volatile.

Q2. When people hear “raw materials”, they often think of traditional commodities. So, what’s so futuristic about “future raw materials”?

That’s an important distinction. This isn’t a traditional commodity play or cyclical pricing bets. Future raw materials are the materials that sit at the heart of structural change – electrification, renewable energy, digitalisation and grid expansion. Copper, lithium and rare earths make these future technologies possible. For our part, we focus on companies involved in extracting, processing and supplying those materials as demand becomes more persistent and strategic.

Put simply, future raw materials are essential to enable the clean energy transition and for building the infrastructure of tomorrow.

Q3. Why was an ETF the right vehicle for accessing this theme?

An ETF is a natural fit for a theme like this because it offers transparent, diversified equity exposure in a simple, accessible format. It allows investors to gain consistent exposure to future raw materials without having to time commodity prices or pick individual stocks.

For a long‑term, structural theme, the ETF structure also supports disciplined, rules‑based implementation as the theme evolves. At the same time, ETFs provide liquidity, transparency and certainty of pricing – all of which are particularly important in fast‑moving markets.

Q4. You’ve identified a focused set of materials rather than taking a broader materials approach. What was the thinking behind that?

For this ETF, we focus on the raw materials that are essential to building the infrastructure of the future. That means identifying a targeted set of materials and then assessing their long‑term growth potential alongside underlying demand and supply dynamics.

Rather than taking a broad‑brush approach, the aim is to stay focused on where we see the strongest structural drivers. That includes an emphasis on materials where supply is more constrained or concentrated, as those dynamics can play an important role in supporting prices over the long term. At the same time, the framework is designed to evolve – giving us the flexibility to adapt as geo‑economic conditions shift and new technologies emerge.

Q5. This ETF is managed by the Quantitative Index Solutions (QIS) team. How does a rules‑based, quantitative approach help investors access a fast‑moving theme?

A core strength of this ETF is its hybrid approach. We combine fundamental active equity research to identify a focused set of strategic minerals with the quantitative expertise of our QIS team.

The quantitative element brings structure and discipline to the portfolio. The QIS team has extensive experience across active and passive equity and fixed income strategies, as well as in portfolio construction and risk management. Utilising their skills and tools helps us build a portfolio that is focused, robust and liquid, while diversified across materials, geographies and individual companies.

Q6. How do you balance fundamental insight with quantitative discipline when building the portfolio?

It really comes back to combining the strengths of both approaches. Deep fundamental research helps us identify the materials that matter most and understand why they are relevant to the theme. Quantitative techniques then shape how those exposures come together in the portfolio.

That systematic approach supports disciplined portfolio construction and helps us maintain balance, robustness and focus. The result is a high‑conviction portfolio with clear thematic exposure, built in a way that’s transparent and consistent over time.

Q7. One year on, what have you learned since launch? Has anything surprised you about how the theme has played out?

What’s stood out is just how clearly this is a long‑duration theme with relevance beyond the here and now. Recent developments have reinforced the strategic importance of critical materials, with governments and markets increasingly focussed on issues such as tariffs, energy security, geopolitics and trade.

In particular, the growth of digital infrastructure, AI and data centres has driven energy demand higher than many expected, increasing the need for the underlying minerals that enable this expansion. What the past year has really underlined is how persistent these pressures are – and why the balance between demand growth and constrained supply is such a central feature of the long‑term investment case.

Q8. As you’ve said, supply constraints are often cited in materials markets. How important is the demand‑supply imbalance to the long‑term case?

It’s absolutely central to the long-term investment case. At the heart of this theme is a structural imbalance between supply and demand. Areas such as clean energy, electrification, grid expansion, and the growth of AI and data centres are all expected to drive strong increases in demand for raw materials in the years ahead.

On the supply side, however, the picture is far more constrained.  New mining projects typically have long and increasing lead times, which limits how quickly new supply can come on-line.

Between 2010 and 2019, it took an average of more than 15 years for a new mine to progress from discovery to production; in recent years, that timeframe has stretched out to over 17 years. That combination of rising demand and slow‑moving supply underpins the long‑term nature of the opportunity.

Q9. From a portfolio perspective, how should investors think about a raw‑materials‑focused equity strategy alongside traditional equities?

We see this theme as a strong complement to traditional equity exposure. It offers a long‑duration opportunity alongside meaningful diversification benefits that can be hard to find elsewhere in equity markets.

Today, many equity portfolios are heavily concentrated in US and technology stocks. A raw-materials-focused strategy tends to have much lower exposure to both, which gives it a distinct and complementary return profile.

From a portfolio perspective, that can help broaden sources of return while maintaining equity‑like growth potential.

Q10. Finally, if you step back from the headlines, how would you sum up what the Future Raw Materials ETF is really trying to capture?

At its core, it’s about investing in the building blocks of the modern, future economy. As energy systems, technology and infrastructure evolve, certain materials become indispensable. This strategy is designed to capture that long‑term shift in a disciplined, transparent way.

 

Fund-specific risks

The fund invests in equity and equity related securities. These are sensitive to variations in the stock markets which can be volatile and change substantially in short periods of time.

A concentrated portfolio may be more volatile and less liquid than a more broadly diversified one. The fund's investments are concentrated in a particular country or sector, or closely related group of industries or sectors.

The fund invests in emerging market equities and / or bonds. Investing in emerging markets involves a greater risk of loss than investing in more developed markets due to, among other factors, greater political, tax, economic, foreign exchange, liquidity and regulatory risks.

The shares of small and mid-cap companies may be less liquid and more volatile than those of larger companies.

The fund may invest in companies with Variable Interest Entity (VIE) structures in order to gain exposure to industries with foreign ownership restrictions. There is a risk that investments in these structures may be adversely affected by changes in the legal and regulatory framework.

Investing in China A shares involves special considerations and risks, including greater price volatility, a less developed regulatory and legal framework, exchange rate risk/controls, settlement, tax, quota, liquidity and regulatory risks.

The use of derivatives carries the risk of reduced liquidity, substantial loss and increased volatility in adverse market conditions, such as a failure amongst market participants. The use of derivatives may result in the fund being leveraged (where market exposure and thus the potential for loss by the fund exceeds the amount it has invested) and in these market conditions the effect of leverage will be to magnify losses.