Uranium prices could explode higher.
In fact, with energy prices surging, many leaders are embracing nuclear power.
“We have added a lot of intermittent power to the grid over the year, but people are starting to realize the need for a stable power source. There are only three options to offset intermittency: burn coal, burn natural gas, or run a nuclear power plant. Nuclear remains the cleanest and safest option. Now politicians are realizing that their decisions to phase out nuclear power might not have been well thought out,” said John Ciampaglia, chief executive officer at Sprott Asset Management, as quoted by Kitco.com.
Supply-demand imbalances could send uranium prices higher, too.
As noted by Ciampaglia, about 130 million pounds of uranium were produced in 2021. However, demand is expected to rise to 180 million pounds this year, and potentially to about 200 million pounds over the next few years.
While investors can always push into Cameco Corp. (CCJ), Uranium Energy (UEC), and Energy Fuels (UUU), ETFs offer greater diversification at less cost. Some of the top ETFs include:
Horizons Global Uranium Index Fund (HURA)
The HURA ETF provides exposure to companies directly responsible for the mining of uranium, with up to 25% of the portfolio providing exposure to the price of the Uranium commodity. Some of its top holdings include Cameco Corp., Yellow Cake PLC, Nexgen Energy, Paladin Energy, Uranium Energy Corp., and Denison Mines Corp. to name a few.
Global X Uranium ETF (URA)
The URA ETF provides investors access to a broad range of companies involved in uranium mining and the production of nuclear components, including those in extraction, refining, exploration, or manufacturing of equipment for the uranium and nuclear industries. Some of its top holdings include Cameco Corp., NexGen Energy, Paladin Energy, Uranium Energy Corp., and Energy Fuels Inc. to name a few.
Sprott Uranium Mining ETF (URNM)
URNM invests at least 80% of its total assets in securities of the North Shore Global Uranium Mining Index. The Index is designed to track the performance of companies that devote at least 50% of their assets to the uranium mining industry, which may include mining, exploration, development, and production of uranium, or holding physical uranium, owning uranium royalties, or engaging in other, non-mining activities.