As acceptance for nuclear energy usage becomes more widespread globally, the infrastructure in which it operates is also evolving. The United States, for example, is looking towards smaller, more efficient reactors that require higher uranium enrichment. In turn, this could fuel demand for miners, thereby creating investment opportunities.
A Wall Street Journal report noted that the current presidential administration under Donald Trump is looking to speed up the process of bringing nuclear plants to full operating capacity. In that regard, smaller reactors could offer a more cost-effective solution that could also provide the much-needed access to nuclear energy at a quicker pace.
The development of artificial intelligence (AI) platforms is already putting a strain on energy demands, especially electricity. In particular, big tech hyperscalers will require additional power to feed data centers that electric grids alone cannot fully handle. Hence, the need for nuclear power to help fill the energy void in electricity generation.
Get Broad Exposure
With the demand for uranium increasing, this can spill over into higher demand for miners. With that, the investment case for the Sprott Uranium Miners ETF (URNM) becomes apparent. The fund includes a wide dispersion of market cap exposure, including large-, mid, and small-cap companies as part of its holdings. That said, URNM is an ideal choice for a broad play on uranium mining.
The fund tracks the North Shore Global Uranium Mining Index. Its constituents include companies involved in mining, exploration, and the development and production of uranium. Furthermore, the fund also adds a touch of physical uranium exposure. Holdings include physical uranium, uranium royalties, and firms that hold the physical metal, or that derive royalties from it.
Capitalizing on Growth
Uranium mining already creates a tremendous growth opportunity for investors, but it could be further amplified with exposure to small-cap stocks. This is where the Sprott Junior Uranium Miners ETF (URNJ) becomes a viable option.
The fund tracks the total return performance of the Nasdaq Sprott Junior Uranium Miners Index. Constituents selected for the index include mid, small-, and micro-cap companies entrenched in the uranium mining business. The exposure to midcap companies can help to temper additional volatility that’s already inherent in the behavior of small- and micro-cap companies.
As opposed to creating a portfolio of individual stocks, URNJ removes all the research guesswork necessary in the convenience of one fund.
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An investor should consider the investment objectives, risks, charges, and expenses carefully before investing. To obtain a Prospectus, which contains this and other information, contact your financial professional or call 888.622.1813. Read the Prospectus carefully before investing, which can also be found by clicking one of the links below.
Past performance is no guarantee of future results. One cannot invest directly in an index.
Funds that emphasize investments in small/mid-cap companies will generally experience greater price volatility. Diversification does not eliminate the risk of investment losses. ETFs are considered to have continuous liquidity because they allow an individual to trade throughout the day. A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when Fund shares are held in a taxable account. These costs, which are not reflected in annual fund operating expenses, affect the Fund’s performance.
Sprott Asset Management USA, Inc. is the Investment Adviser to the ETFs. ALPS Distributors, Inc. is the Distributor for the ETFs and is a registered broker-dealer and FINRA Member. ALPS Distributors, Inc. is not affiliated with Sprott Asset Management USA, Inc. or VettaFi.
Exchange Traded Funds (ETFs): SETM, LITP, URNM, URN, COPP, COPJ, NIKL, SGDM and SGDJ
Physical Bullion Funds: PHYS, PSLV, CEF, and SPPP.
