Investors are once again focusing on Uranium. Causing talk of a Uranium Renaissance.
Even the Senate’s border and Ukraine spending package contains more than $2 billion in funds for uranium processing, as the U.S. works to reduce global reliance on Russian energy exports.
The text of the bill, includes $2.72 billion in unspent grant funding for domestic uranium enrichment, with the goal of bolstering nuclear fuel development. Another $98 million would go to domestic isolation and production of isotopes, a major Russian export. The package would also put $149 million toward the National Nuclear Security Administration.
This is just one example of how demand for Uranium is firming and supporting higher prices.
One of the premier uranium mining companies in the West is Canada's Cameco Corp. (CCJ)
Other Canadian players include NexGen Energy Ltd (NXE) and Fission Uranium Corp. (OTC: FCUUF)
Diversified miners that also extract substantial quantities of uranium are BHP Group Ltd (BHP)
and Rio Tinto Group (RIO)
Nuclear Utilities could be a defensive addition to a portfolio to gain exposure and receive enhanced dividends.
Another way that an investor can gain access to this market is through a variety of ETF and managed funds that invest in the underlying companies with exposure to the business.
VanEck Uranium+Nuclear Energy ETF (NLR)
The VanEck Uranium+Nuclear Energy ETF invests in miners, nuclear utilities, nuclear power plant builders and businesses that supply the nuclear power industry.
NLR has an expense ratio of 0.61% and a 12-month trailing yield of 4.3%. After underperforming in 2022, NLR returned 36.6% in 2023 and is off to a solid start in 2024, up 8.5% year to date as of Feb. 2.
Global X Uranium ETF (URA)
The Global X Uranium ETF invests in companies involved in uranium mining and nuclear industry component production. With $3 billion in total assets and a 12-month trailing yield of 5.5%, URA is doing well in its category in 2024 with a year-to-date gain of 13.8%. This follows a blistering annual performance in 2023, when URA returned 46%.
Top holdings in URA's portfolio are Cameco, with a 23% portfolio weighting; units of Sprott Physical Uranium Trust (OTC: SRUUF), at 9%; and NexGen Energy, at 6%.
Sprott Uranium Miners ETF (URNM)
The Sprott Uranium Miners ETF buys shares in companies involved in mining, exploration, development and production of uranium and those that hold physical uranium, uranium royalties or engage in other non-mining activities that support the uranium mining industry. The fund usually invests 80% or more of its assets in the securities of the North Shore Global Uranium Mining Index, so its returns generally track those of the index.
URNM has over 75% of its assets in its top 10 holdings; the top three are Sprott Physical Uranium Trust units, Kazatomprom and Cameco, which get a roughly 14% weighting each. It also allocates about 4% to Denison Mines.
Please note: None of these ideas are to be considered as specific recommendations. Akin Investments is simply using the above named issues as examples of ways to participate in the Uranium Renaissance. For specifics reach out now for your personal free consultation.
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