European white labeller HANetf reports that Sprott Uranium Miners UCITS ETF (URNM) has now passed the USD51 million assets under management (AUM) milestone for the first time.
URNM, which tracks the North Shore Sprott Uranium Miners Index, was launched in May 2022, and provides investors with a way to access the growth of nuclear power through exposure to uranium miners. Alongside uranium mining equities, the ETF invests in physical uranium through investment trusts.
The Sprott Uranium Miners UCITS ETF was launched in partnership with Sprott Asset Management. Sprott are global experts in the uranium space, overseeing a US-listed sister uranium miners ETF with around USD700 million AUM and a physical uranium trust with almost USD3 billion AUM.
In response to the energy crisis, global leaders have been increasingly looking to alternative sources of energy, HANetf writes. The United States and European Union member states have earmarked increased funding to support nuclear power, as well as extended the lifecycle of existing nuclear plans. Growth is also strong in Asia, with China committing to build as many as 150 new nuclear reactors over the next 15 years. Meanwhile, Japan has increased its plans to generate more nuclear power, a stark change in sentiment given the Fukushima disaster in 2011.
Further to this, in July 2022, the European Union agreed to classify nuclear energy as ‘green’, meaning that it can be considered as a valid contributor in the race to net-zero. While nuclear energy is not renewable, its CO2 emissions per gigawatt-hour (GWh) are in fact lower than those of wind, solar, hydro, and biomass energies, HANetf writes. As such, nuclear energy could be an ideal solution for countries that are looking to both secure their energy supply, and also reduce their carbon emissions, the firm says.
This growth of nuclear power is exacerbating a supply deficit for uranium, the feedstock of nuclear power, the firm writes, adding that as a result, many investors believe uranium is on the cusp of a new bull market. Many investors view uranium miners as an attractive way to play this.
John Ciampaglia, CEO of Sprott Asset Management comments: “Investor interest in uranium continues to grow globally in response to the growing realisation that nuclear energy is critical to achieve net-zero targets, while providing energy security. The uranium mining sector is well positioned to benefit from both growing demand and higher prices for uranium. In 2022, we saw the highest amount of uranium purchased by utilities in 10 years, but it still remains well below the annual inventory replacement rate.”
Hector McNeil, co-CEO and co-Founder of HANetf says: “It is great to see the growth of Sprott’s uranium miners ETF. When the ETF was still in the idea stage, we expected to see more governments commit to boosting nuclear power in their energy fix. In 2022 this was confirmed, as governments around the world came out in favour of reviving or renewing their nuclear power industries. Investors are clearly noticing, buying up the Sprott Uranium Miners UCITS ETF (URNM).”