Uranium ETF Has Junior Tilt

Today, Exchange Traded Concepts rolled out an ETF that targets uranium miners and—to a lesser degree—companies that hold physical uranium. The North Shore Global Uranium Mining ETF (URNM) differs from existing uranium ETFs in that it uses a modified market capitalization approach that is designed to limit the influence of any single company rather than simple market cap weighting.

URNM comes with an expense ratio of 0.85% and lists on the NYSE Arca.

“After a multi-year bear market, we believe that the uranium sector is at an inflection point. The fundamentals of the industry have improved on the back of strong nuclear power demand growth and global supply cuts which have pushed the market into a deficit,” noted North Shore Indexes CEO and Founder Tim Rotolo. 

“Given the current state of uranium mining economics, a considerable price rise will be required if new mines are to be brought on line to meet the future supply needs,” he added.

Underlying Index

The methodology for the North Shore Global Uranium Mining Index selects companies that are involved in uranium mining and weights them at 82.5% of the index and also selects companies that hold physical uranium or uranium royalties, weighting those firms at 17.5% of the index. Further, 90% of the index’s weight is allocated to companies with more than $100 million in market cap, with the rest of the component list consisting of companies falling below that threshold, according to the prospectus.

URNM joins two other ETFs covering the space, including the $182 million Global X Uranium ETF (URA), which comes with an expense ratio of 0.69%. The smaller VanEck Vectors Uranium+Nuclear Energy ETF (NLR) charges just 0.60% but only has $22.5 million in assets. The latter fund has a broader focus on the nuclear energy industry, with more than 90% of the ETF invested in the utilities sector, while URA seems more similar in focus to URNM and doesn’t even include utilities in its top three sectors.

According to URNM’s fact sheet, the index included 26 components as of the end of September.

Contact Heather Bell at [email protected]