Tax-Loss Harvesting Strategies for Critical Materials Holdings

For the latest standardized performance and holdings of Sprott Critical Materials ETFs, please visit SETM. Past performance is no guarantee of future results.

• Is Now the Time to Reassess Your Critical Materials Exposure?
• How Does Tax-Loss Harvesting Work?
• Consider a Shift to the Sprott Uranium Miners ETF (URNM)

Is Now the Time to Reassess Your Critical Materials Exposure?

Recent declines across critical materials equities may have left some investors with unrealized losses, creating potential tax-loss harvesting opportunities. As these materials become increasingly important to economic growth and national security, rising demand and limited supply are strengthening the long-term investment case.

Investors who are constructive on the critical materials theme may be able to realize losses in existing positions while maintaining exposure to a more focused list of critical materials essential for strategic sectors like energy, technology and defense, and limiting exposure to China. 

Realizing a loss by December 31 may provide a strategic opportunity to offset gains elsewhere, and shift—or possibly enhance—your investment exposure to critical materials.

How Does Tax-Loss Harvesting Work?

For U.S. federal income tax purposes, tax-loss harvesting involves selling investments held in taxable accounts at a loss to help offset capital gains and potentially reduce taxes owed. If losses exceed gains, eligible investors may also be able to use a limited amount of excess losses to offset ordinary income, subject to IRS rules. The proceeds from the sale can be reinvested in other investments. 

Users of this strategy need to consider the wash-sale rule, which prevents an investor from selling at a loss and then buying a “substantially identical” stock or security within 30 days before or after the sale, creating a 61-day window around the transaction. However, investments with sufficiently different allocations or holdings—ones that provide similar market exposure but are different in a meaningful way—may be acceptable substitutes. This means that tax-loss harvesting can be an opportunity to shift your allocation.

Consider a Shift to the Sprott Critical Materials ETF (SETM)

The Sprott Critical Materials ETF (SETM) is a one-ticker solution to the critical materials investment opportunity, providing equity exposure to uranium, copper, rare earths, lithium, nickel, cobalt, graphite, manganese and silver.

Why Invest in Critical Materials?

• Critical materials are strategically important and are foundational to many of the world’s most important industries.
• Rising global energy demand, AI data center infrastructure, defense, advanced technologies and energy security initiatives are expected to support long-term growth in demand for critical materials.
• Limited supply, concentrated supply chains, and geopolitical risks are contributing to supply shortfalls and elevating critical materials to an economic and national security priority.

Learn more about the Sprott Critical Materials ETF.