Toronto-based Sprott Asset Management has entered into a definitive agreement to acquire the $850 million NYSE Arca-listed North Shore Global Uranium Mining ETF (URNM US).
Nuclear power is a completely clean energy source – the cooling towers on nuclear power plants emit just water vapor.
URNM was brought to market in December 2019 through a partnership between indexing boutique North Shore Indices and white-label ETF provider Exchange Traded Concepts.
The ETF tracks the North Shore Global Uranium Mining Index which targets companies worldwide that specialize in the mining, exploration, development, and production of uranium, as well as firms holding physical uranium, uranium royalties, or other uranium-related, non-mining assets.
The fund began the year with approximately $40m in assets but is rapidly approaching the $1 billion milestone courtesy of robust investor demand and stellar returns.
URNM has gathered more than $650 million in net inflows since 1 December 2020 and has delivered a massive performance gain of 257.6% over the past year. Data as of 5 November.
Uranium spot prices have exploded over the past year as publicity surrounding the global climate crisis has raised the demand for clean, emissions-free sources of power such as nuclear energy.
The rally in uranium prices had also started from a low base as the 2011 Fukushima disaster, and the subsequent disavowing of nuclear energy by many governments, had resulted in a nearly decade-long slide in uranium prices.
John Ciampaglia, CEO of Sprott Asset Management, said: “We believe we are in the early stages of a uranium bull market and URNM is a perfect complement to our Sprott Physical Uranium Trust, the world’s largest physical uranium fund. URNM is the only US-listed pure-play uranium equities ETF, and we look forward to providing investors with two compelling options to invest in the sector.”
Under the terms of the agreement, which is still pending regulatory and shareholder approval, Sprott would obtain the exclusive license for the underlying North Shore Global Uranium Mining Index, while URNM would be reorganized into the Sprott Uranium Miners ETF, due to be completed by Q1 2022.
The reorganized fund will be advised by Sprott Asset Management and sub-advised by ALPS Advisors. It is expected to maintain its current ticker and expense ratio of 0.85%.
Investors exploring opportunities in the uranium theme might also wish to look at the other big ETF in the space, the $1.4bn Global X Uranium ETF (URA US). This fund is linked to the Solactive Global Uranium & Nuclear Components Total Return Index and comes with an expense ratio of 0.69%. It has delivered a relatively smaller, but nonetheless still substantial, gain of 158.3% over the past year.
*URTH_US references the performance of developed market stocks through the iShares MSCI World ETF (URTH US). It has gained 29.5% over the past year.