The URNM ETF provides a convenient way to invest in the uranium/nuclear thematic. Arguments supporting growth of nuclear power are persuasive, but some of the assumptions made by sector bulls may be too optimistic. Digging into URNM's holdings reveals issues that some investors may not be comfortable with.
I remain bullish on uranium ETFs URNM and URNJ, as they offer comprehensive exposure to the uranium mining industry and spot uranium. The global energy transition has highlighted nuclear power's necessity, with supply-demand imbalances and depleted mines driving uranium prices higher. Recent catalysts, including new reactor builds and policy shifts, reinforce the long-term investment case for uranium. Even the World Bank is now on board with funding nuclear energy projects.
Sprott's unexpected move signals a major reawakening of the physical market. This decision could have significant implications for the already tight uranium market. I believe this move reflects investors' confidence in underlying fundamentals and long-term growth potential.
I remain bullish on the Sprott Uranium Miners ETF due to strong industry fundamentals, though I now rate it a buy after a 50+% recent run. URNM and URNJ offer the purest exposure to uranium miners, ETFs like URA and NLR include non-uranium holdings. Recent performance has been relatively good, with URNM up 35% over three years and outperforming uranium spot and contract prices since inception.
Despite the tariff volatility, uranium has been a proverbial rock among the crashing waves. The metal has been exhibiting resilience amid renewed interest from investors backed by solid fundamentals.
URNM, launched in 2019, focuses exclusively on uranium equities and has 36 holdings with significant investments in Cameco, Kazatomprom, and the Sprott Physical Uranium Trust. Despite healthy net inflows and a 38% increase in the share count over the past two years, URNM's AUM has nearly halved due to poor performance and depressed sentiment. The ETF is well-diversified, but naturally has larger allocations to the most liquid uranium equities to support substantial investment flows.
URNM: The Supply-Demand Situation Is Still Attractive For Uranium Equities
The final trades of the day with CNBC's Melissa Lee and the Fast Money traders.
Demand for nuclear energy continues to translate to profits for uranium producers, with Kazakhstan-based Kazatomprom being the latest beneficiary. The company saw its third-quarter pre-tax profit double due to rising uranium spot prices.
Uranium demand is rising due to nuclear power and military needs, pushing prices higher and benefiting mining companies like Cameco. The Sprott Uranium Miners ETF invests in leading uranium mining companies, offering a 3.65% yield and significant exposure to Cameco. Despite a correction, URNM has shown a bullish trend since September 2024, with potential for a 26% return from current levels.
Sprott Uranium Miners ETF offers exposure to uranium mining companies, capitalizing on the growing demand for clean energy and nuclear power. I believe that AI's growing energy demands make uranium a key part of the future energy mix. The uranium market may be slow now, but I expect demand to spike in the near future, especially from AI hyperscalers.
Uranium is becoming a key player in the global shift to clean energy, with potential for growth and profits in the nuclear power sector. Sprott Uranium Miners ETF provides direct exposure to the uranium mining industry, with top holdings in companies like Cameco Corp. and NAC Kazatomprom. URNM outperformed Global X Uranium ETF since 2020, offering a more focused approach to the uranium mining industry with potential risks and rewards.