HANetf has announced that Sprott Uranium Miners UCITS ETF (URNM) has surpassed USD75 million in assets under management (AUM) for the first time since its launch, reaching USD79 million as at 24th August 2023, as uranium continues to outperform the Bloomberg Commodity Index (BCOM) year-to-date.
HANetf writes that URNM, which tracks the North Shore Sprott Uranium Miners Index, was launched in May 2022 and provides exposure to the growth of nuclear power through uranium miners. Alongside uranium mining equities, URNM also invests in physical uranium through investment trusts – the ETF currently has around 17 per cent direct uranium exposure.
The ETF was launched in partnership with uranium experts Sprott Asset Management, which oversees a US-listed sister uranium miners ETF with USD957 million AUM and a physical uranium trust with over USD3.5 billion AUM. The sister ETF, listed on NYSE Arca (URNM), was this recently featured by VettaFi as its “ETF of the week”.
The U3O8 spot price has posted a 16.35 per cent year-to-date (YTD) return as of 31st July 2023, demonstrating its strength and diversification relative to other commodities, which declined -4.85 per cent YTD, as measured by the BCOM Index, HANetf writes.
In response to the worsening energy crisis, and the increasingly urgent need to achieve net-zero targets, global leaders are looking to alternative sources of energy. Nuclear power is viewed as an efficient, safe, and clean solution given that it has less CO2 emissions per GWh than wind, solar, and hydro energy.
Last month, the UK restarted Great British Nuclear, sponsored by the Department of Energy Security and Net Zero, to support the government’s pledge to achieve its net-zero targets and reduce dependence on volatile fossil fuel imports.
Also in July, Japan restarted its 11th nuclear power plant since 2016, having pledged to extend the operation of existing reactors and upgrade older ones to address global fuel shortages and achieve carbon neutrality by 2050.
Meanwhile in the US, the senate overwhelmingly passed the Nuclear Fuel Security Act in February, aiming to reshore up its nuclear fuel supply chain away from Russia. States that were previously uranium producing are therefore pushing to restart idle capacity to meet the 50-million-pound (lbs) demand of the US’ fleet of nuclear reactors, HANetf writes.
The price of uranium has “doubled in two years”, demonstrating market anticipation of uranium demand growth in the coming years.
As countries increasingly seek energy independence and strive to meet ambitious net-zero targets, nuclear power is viewed as an ideal solution. Demand for uranium, therefore, is unlikely to slow down anytime soon, HANetf says.
Hector McNeil, Co-Founder and Co-CEO of HANetf comments: “We are delighted to witness URNM’s rapid growth and its surpassing of USD75 million in AUM. Uranium is in high demand, as evidenced by its strong performance against other commodities so far this year. There is a dual need for countries to gain energy security, and also achieve net-zero targets in response to increasing legislation.
“Sprott Uranium Miners UCITS ETF (URNM) offers exposure to the growth of nuclear power through uranium miners, which have been historically underrepresented in the energy sector, posing upside potential.”
