💥 Nuclear ETFs are the New Hotness

TrackStar is always full of surprises.

At first, we thought the surge in financial pro search volume for the North Shore Global Uranium Mining ETF (URNM) was an error.

….nope…

Interestingly, we didn’t see a similar search volume increase on the retail side.

Uranium was a hot topic last year. However, it’s been largely forgotten, which is why the sudden interest seemed out of place.

Rather than fight the trend, we decided to make it our focus for today’s issue of The Spill.

Key Facts About URNM

• Net assets: $863 million
• 12-month trailing yield: 7.86%
• Inception: December 3, 2019
• Expense ratio: 0.85%
• Number of holdings: 39

Anyone who’s looked into Uranium stocks is probably familiar with the Global X Uranium ETF (URA).

None of us had heard of Sprott’s Uranium Miner ETF.

The fund invests at least 80% of its money into assets tied to the North Shore Global Uranium Mining Index (URNMX), something we’d also never heard of.

This index tracks companies that devote at least 50% of their assets to the uranium mining industry, including mining, exploration, development, or  production. 

However, it also includes companies that hold physical uranium, own uranium royalties or engage in non-mining activities that support the uranium mining industry.

Source: Sprott ETF Website

The top 10 companies make up ¾ of the total weighting.

A huge chunk of the companies are located outside the U.S.

Source: Sprott ETF Website

That’s probably why we’ve never heard of most of the holdings. And before today, we’d never heard of Sprott either.

Performance

Since the ETF started in late 2019, it’s held up reasonably well.

It’s pulled in an average annual return of 35.28% since inception.

Source: Sprott ETF Website

Additionally, the ETF rarely trades at a more than 2% premium to the index. 

Since late 2021, the ETF has traded more consistently at a premium and a discount to the index, giving it a better balance.

Competition

Since there aren’t many uranium ETFs, we took a broader look to include alternative energy ETFs:

• Global X Uranium ETF (URA): URA offers exposure to uranium, often trading as a leveraged play to uranium prices.
• Invesco Solar ETF (TAN): This fund provides targeted exposure to solar power energy, with 35 individual components and four names accounting for more than a third of the assets.
• iShares Global Clean Energy ETF (ICLN): ICLN invests in domestic and international companies engaged in renewable energy, including wind and solar.
• Invesco WilderHill Clean Energy ETF (PBW): Similar ICLN, PBW holds companies focused on green and renewable energy or facilitates their development and production.

We double-checked to make sure, and URNM has outperformed URA quite handily over the years. 

However, the dividend yield isn’t correct, as the past payout was in early 2022 and was 5x the one from the prior year. They also haven’t announced one since.

Our Opinion 10/10

We have to admit, this ETF looks pretty awesome.

Sure, it’s volatile and could collapse. But it’s done remarkably well with some hefty returns.

We wouldn’t take a huge position and would use limit orders to buy or sell the stock, given the lower liquidity.

But as far as alternative energy ETFs go, this is definitely a hidden gem.