As of 31/05/2023
The Sprott Uranium Miners UCITS ETF (URNM) seeks to provide investors with a way to invest in the growth of nuclear power through exposure to uranium miners. This comprises companies involved in the uranium industry, spanning the mining, exploration, development and production of uranium.
The Uranium Miners ETF is also permitted to invest in entities that hold physical uranium, uranium royalties or other non-mining assets.
We believe these companies may stand to benefit from nuclear power’s increasing contribution to the green energy transition.
Please remember that the value of your investment may go down as well as up and past performance is no indication of future performance.
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Why Invest in the Uranium Miners ETF?
Uranium Miners May Be Poised to Take Market Share Within the Energy Sector:
Global demand for electricity is growing rapidly, presenting a clear need for efficient, clean and cost-effective energy. Uranium miners are under-represented across the energy equity sector, posing upside potential. Uranium mining has been lower than reactor demand for decades, leaving a supply gap. (https://www.eia.gov/todayinenergy/detail.php?id=44416)
Uranium and Nuclear Energy May Be Critical to the Clean Energy Transition:
Nuclear energy is relatively more reliable, efficient, clean, safe and secure than other energy sources. Given the race to net zero, government policies are shifting in favour of nuclear energy, an ideal complement to renewable energy sources. (https://www.iaea.org/newscenter/pressreleases/iaea-releases-report-on-nuclear-energy-for-a-net-zero-world-ahead-of-cop26-climate-summit)
New Uranium Bull Market is Underway, Incentivising Miners and Investors:
Existing uranium supply may not meet future demands, encouraging non-utility uranium buyers to enter the market. Utilities are expected to accelerate purchases of uranium to ensure security of supply and price over the long-term. Availability of secondary supplies of uranium have been drawn down over the past few years. Uranium spot prices have recently surged, helping drive strong and sustainable economics of uranium miners. (https://markets.businessinsider.com/news/commodities/uranium-prices-outlook-russia-energy-nuclear-supply-risk-commodities-biden-2022-4)
Key Risks
The uranium and nuclear industry can be impacted by changes in politics/government regulation, breaches of security, ill-intentioned acts of terrorism or natural disasters.
Activities related to mining/exploration may be capital intensive, requiring significant debt to maintain operations.
Uranium companies’ performance may be heavily reliant on the underlying price of uranium which can be volatile.
Uranium companies may have small market capitalizations and low liquidity.
Uranium companies may be domiciled in non-developed markets and may have foreign currency risk.
ETFs may carry unique risks such as basis risk and lower than anticipated liquidity.