Best 5 Uranium ETFs in 2022

Feb 18, 2022 01:00 PM ET
Best 5 Uranium ETFs in 2022

Investment inflows have automatically shifted to hard assets such as commodities and precious metals.  Uranium is one of these, with current demand far exceeding what companies can supply. ETFs are one of the many ways to invest in uranium. ETFs are a collection of financial assets with comparable economic characteristics that are pooled together. As a result, such ETFs are made up of stocks that are linked to companies in the uranium and nuclear energy value chain. We discuss the top uranium ETFs in this post, but we do not provide management advice, and if you decide to invest in them, you are solely responsible for any profit or loss.

Why should you invest in uranium ETFs?

Uranium and nuclear energy operations are concentrated in a small number of nations and organizations throughout the world, making this a true niche industry. As a result, identifying a single asset as a legitimate winner when this market erupts will be difficult.  Uranium exchange-traded funds fill this void. They expose investors to a basket of commodity-related ETFs rather than a single asset, allowing for diversification.

1. Global X Uranium ETF (URA)

URA 5-year interactive chart

URA is a focused investment in uranium mining and nuclear component manufacture. URA provides convenient access to a basket of enterprises active in uranium mining and nuclear component manufacturing in a single trade. Its top 3 holdings are Cameco Corporation, National Atomic Company Kazatomprom JSC Sponsored GDR RegS and NextGen Energy Ltd.

The investment aims to offer investment outcomes that are broadly comparable to the Solactive Global Uranium & Nuclear Components Total Return Index's price and yield performance before fees and costs. The fund invests at least 80% of its total assets in the underlying index's securities, as well as American Depositary Receipts ("ADRs") and Global Depositary Receipts ("GDRs") based on those securities. The underlying index is intended to track the performance of worldwide enterprises active in the uranium sector on a broad basis. This fund has no diversification.

Although past performance is no guarantee of future results, the present year-to-date returns of 89.36%, as well as the historical returns, suggest that URA should be considered as an asset to keep in 2022.

2. VanEck Uranium Nuclear Energy ETF (NLR)

NLR 5-year interactive chart

The VanEck Uranium+Nuclear Energy ETF (NLR) aims to closely replicate the price and yield performance of the MVIS Global Uranium & Nuclear Energy Index (MVNLRTR), which is designed to follow the overall performance of firms involved in the projects below.

  • Uranium mining or uranium mining projects with the potential

  • Nuclear power plant and nuclear reactor construction, engineering, and maintenance

  • The use of nuclear power to generate energy

  • Providing the nuclear power industry with equipment, technology, and/or services

Its top four holdings include Duke Energy Corporation, Dominion Energy Inc, Exelon Corporation, and Public Service Enterprise Group.

With $30.02 million in assets under management, it is one of the smallest ETFs. Investors, however, pay $61 every $10,000 invested yearly. The NLR is worth watching for holding in 2022, with a dividend yield of 1.97 percent and current year-to-date returns of 14.45 percent, as requests for green energy rise.

3. Sprott Physical Uranium Trust (SRUUF)

SRUUF 5-year interactive chart

Sprott Physical Uranium Trust is a publicly-traded physical uranium fund located in Canada. The Company's investment goal is to invest and retain uranium in the form of triuranium octoxide (U3O8) and uranium hexafluoride (UF6). The Company's investment manager is Sprott Asset Management LP.

SRUUF manages $1.6 billion in assets, with investors paying a $35 yearly management fee for a $10,000 investment. It has been gathering the required warfare to take advantage of the nuclear energy niche if it is poised to burst.

Most experts credit SRUUF's strong physical uranium purchases for the uranium ETF's stratospheric growth. In addition, the price of SRUUF has changed significantly over the previous five years, with a five-year price change of +92.90% a one-year growth of +91.15%, a reason why you should consider investing in it in 2022.

4. North Shore Uranium Mining ETF (URNM)

URNM 5-year interactive chart

The instrument aims to produce investment outcomes that, before fees and expenditures, are roughly equivalent to the North Shore Global Uranium Mining Index's total return performance. The fund will typically invest at least 80% of its total assets in index securities. 

The index is meant to measure the performance of firms who invest at least 50% of their assets in one of the following activities: 

  • Uranium mining, exploration, development, and production.

  • Storage of actual uranium, holding uranium royalties, or participating in non-mining activities that help the uranium mining sector.

Its top four holdings are Clear Channel Outdoor Holdings, National Atomic Co Kazatomprom JSC ADR KAP, Yellow Cake PLC Ordinary Shares YCA, and Eaton Vance Senior Floating-Rate Trust EFR. This uranium ETF, which has been rated one of the top-performing ETFs of 2020, is worth owning since all signs point to it continuing to make money, with current year-to-date gains of 123.59 percent.

5. Global Uranium ETF (HURA)

HURA 5-year interactive chart

HURA aims to replicate, as closely as feasible, the Solactive Global Uranium Pure-Play Index's performance net of expenditures. The Solactive Global Uranium PurePlay Index is designed to give exposure to the performance of a basket of issuers that are:

  • principally engaged in uranium mining and exploration

  • invested and participated directly in the physical price of uranium.

Its top four holdings include National Atomic Co Kazatomprom JSC ADR,  Cameco Corp, Uranium Participation Corp, and NexGen Energy Ltd. The HURA ETF currently manages $41.5 million in assets. Despite only being in existence for a year, this ETF managed to generate 66% gains. Given that this return has been followed up by a current year-to-date performance of 66.05 percent, HURA is worth including in your 2022 portfolio.

Summary

ETFs are a good option for those who want exposure to the mining sector as well as other companies in the nuclear energy business without having to choose specific uranium equities. Investing in ETFs can provide some protection against unpredictable commodity prices.  In addition, investing in uranium is considered a defensive investment in a downturn since people will want power regardless of the state of the economy.

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