Toronto-based Sprott Asset Management is preparing to launch a new ETF in Europe providing exposure to small and mid-cap companies from the uranium mining industry.
Uranium prices have soared recently amid growing demand for nuclear energy.
The Sprott Junior Uranium Miners UCITS ETF (URNJ) is due to be listed in the coming weeks on London Stock Exchange, Deutsche Börse Xetra, and Borsa Italiana.
The fund will come with an expense ratio of 0.85%.
The introduction of URNJ expands Sprott’s European ETF lineup to four, with its existing suite also dedicated to niche segments or thematic investment strategies within the global mining sector. Each of these ETFs has been launched in collaboration with HANetf, a leading European white-label ETF platform.
Among Sprott’s current European offerings is the $340 million Sprott Uranium Miners UCITS ETF (URNM LN), targeting exposure to larger-cap uranium mining companies.
According to Sprott, uranium mining stocks stand to gain as the world turns to nuclear power for dependable and low-carbon energy. This shift was highlighted at COP28 in December 2023, when 22 nations, including major powers such as the United States, Canada, France, Japan, and the United Kingdom, committed to the Declaration to Triple Nuclear Energy by 2050.
This ambitious target underscores the expected surge in nuclear energy capacity, which in turn suggests an increasing uranium demand to outpace the current supply. This scenario is expected as countries plan for nuclear reactor restarts, new construction projects, and reconsiderations of decommissioning existing reactors.
Hector McNeil, Co-Founder and Co-CEO of HANetf, commented: “Uranium prices have surged over the past year, entering a new bull market as the indispensable role of nuclear power in the energy transition becomes apparent. Investor interest has steadily risen, as shown by the extraordinary growth of URNM. But missing from Europe until now has been a small and mid-cap uranium miners-focused ETF. We have seen a flood of inquiries from investors asking if we are bringing a Junior Uranium Mining ETF to the European market. We are very proud to be launching Europe’s first Junior Uranium Mining UCITS ETF and even more proud to be doing so in partnership with Sprott Asset Management, who are real leaders in the uranium investment space.”
Methodology
The new fund will track the Nasdaq Sprott Junior Uranium Miners Index which covers mid, small, and micro-cap companies deriving more than 50% of their revenue or assets from the mining, exploration, development, or production of uranium.
The index also includes firms that hold physical uranium, own uranium royalties, or engage in other non-mining activities that support the uranium mining industry.
Companies must have a market capitalization between $30m and $3 billion to be eligible for inclusion.
The index is weighted by float-adjusted market capitalization subject to a cap of 12% on each of the top four positions and a cap of 4.75% on any other stock.
As of the end of January, the index contained 32 stocks with the most notable positions being Paladin Energy (13.6%), Uranium Energy (12.0%), NexGen Energy (11.7%), Denison Mines (10.4%), and Boss Energy (5.1%).