Uranium ETFs Quietly Surge

While oil’s wild swings have captured the attention of consumers and the finance world alike, uranium mining ETFs have emerged as one of the best-performing segments since the beginning of Russia’s invasion of Ukraine.

The North Shore Global Uranium Mining ETF (URNM) has outperformed all other U.S.-listed nonlevered ETFs in the past 30 days with a 31.57% return, while the Global X Uranium ETF (URA) has posted a third-best 26.69% return, according to ETFLogic data.

Russia’s assault and its isolation from Western economies is partially to blame. Russia accounted for approximately 6% of the world’s uranium exports in 2020, while Ukraine accounted for approximately 1.5% of global supply. The VanEck Uranium+Nuclear Energy ETF (NLR) is up a muted 7.34% on the year, due in part to having a heavy weighting to energy utilities with nuclear plants instead of pure-play uranium mining operations.

The acceleration of renewable energy plans from Western governments is also driving investment into uranium as part of a broader renewable energy mix, as Western governments seek to phase out their significant reliance on Russian oil and gas.

British Prime Minister Boris Johnson announced plans earlier this week to increase nuclear use in the country from 16% of its current power mix to a quarter, including replacing several reactors due for age-related retirement. The White House also held a summit last week to explore the commercial viability of nuclear fusion as a replacement for fossil fuels.

URA has added just shy of $450 million in assets this month to have $1.8 billion in assets under management as of Monday, while URNM with its higher average share price and expense ratio has added $171 million to have $989 million in AUM. Those are increases of 33% and 21%, respectively.

URA Flows

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URNM Flows

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However, the gains are small compared to the triple-digit returns the funds generated after nuclear briefly took meme stock status last fall.

URNM is in the process of being acquired by Toronto-based Sprott Asset Management as a complement to the firm’s existing physically backed uranium trust. That firm is also in the process of applying to list a new class of shares of that trust on U.S. markets later this year.

Contact Dan Mika at [email protected], and follow him on Twitter