The long-term prospects for uranium continue to remain bullish after several countries recognized the key role of nuclear energy to reduce emissions. This should provide exchange traded fund (ETF) investors opportunities in uranium miners.
As mentioned, during the World Climate Action Summit of the 28th Conference of the Parties to the U.N. Framework Convention on Climate Change or COP28 for short, various countries confirmed the use of nuclear power as a viable energy source. As more countries become receptive to nuclear energy, this could potentially add to its upside.
In order to realize its potential, however, more capital investment is necessary. Fortunately, a number of investors are also receptive to nuclear power as a tremendous growth opportunity.
“The industry will require significant capital investments to meet its ambitious expansion plans,” said John Ciampaglia, CEO of Sprott Asset Management. “Thankfully, investor interest in the sector is growing globally as the opportunity becomes better understood and the legacy stigma fades.”
“As the sector grows and recapitalizes, it will attract ever larger institutions, drawn by a compelling investment thesis and improving liquidity,” Ciampaglia added. “While 2023 was a momentous and rewarding year for nuclear energy, uranium and the miners, we remain bullish on the long-term prospects for the sector.”
2 Uranium Mining ETF Options
Demand for uranium to create nuclear power should also increase demand for mining. As such, growth prospects in uranium mining are available in a pair of Sprott ETFs, one for large cap equities and another for small caps.
“Restarts of existing uranium mines that have been on care and maintenance for as long as 2013 are slowly coming back to life after a one- to two-year ramp-up period,” Ciampaglia said.
The Sprott Uranium Miners ETF (URNM ) tracks the North Shore Global Uranium Mining Index and invests in global firms that mine, develop, and produce the metal as well as those firms that hold the physical metal or royalties from it. The fund has a more large-cap focus with exposure to large players in the metal’s mining space, like Cameco.
For even higher growth potential, investors can opt for small-cap companies or for a more all-inclusive option, the Sprott Junior Uranium Miners ETF (URNJ ). The fund seeks to provide investment results that, before fees and expenses, correspond generally to the total return performance of the Nasdaq Sprott Junior Uranium Miners Index, which tracks mid-, small- and micro-cap companies in the metal’s mining business.
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