The JSS Sustainable Equity – Strategic Materials fund, which focuses on the strategic materials value chain, has highlighted three stocks it currently favours. The fund allocates between 70% and 80% of its investments to upstream mining companies, with the remainder going to recyclers, mining equipment manufacturers, battery producers, and advanced materials companies.
The fund is categorised as Article 8 under the EU's SFDR sustainability regulations, indicating it promotes environmental or social characteristics. This approach links sustainability with returns, as poor relationships with local communities, regulators, or governments can lead to operational issues such as mine delays, increased costs, or loss of operating licences.
Among the stocks identified are Acerinox, a Spanish producer of stainless steel and speciality alloys, including high-performance alloys used in aircraft engines and aerospace applications. Wheaton, a streaming company, provides upfront financing to miners in exchange for future gold and silver production at predetermined prices, a model described as having lower risk exposure to precious metals. Freeport-McMoRan, one of the world's largest copper producers, offers exposure to copper, a commodity seen as critical for electrification and other industries, with its Grasberg mine in Indonesia ramping up production after a disruption last year.