President Trump’s executive orders on May 23 continue to build momentum for uranium. That’s because investors are more clear on the direction the administration will take in terms of using nuclear power.
Heading into 2025, the market wasn’t certain on whether the new presidential administration would adopt the previous administration’s sentiment on nuclear power as a viable alternative energy source. The previous administration under Joe Biden supported the expansion of nuclear energy. And now it appears President Trump will do the same with these four new executive orders.
The orders essentially pave the way for the Nuclear Regulatory Commission (NRC) to expedite the licensing process to create new nuclear reactors and power plants. This removes regulatory hurdles. That would fast-track projects. It would also provide federal subsidies to support industry growth in the nuclear energy sector. Additionally, tax credits for new and existing nuclear plants will be retained as long as projects construction before January 1, 2029. Overall, the goal is to quadruple domestic production of nuclear power within the next 25 years, which bodes well for uranium prices.
“It’s a very holistic approach that should benefit the sector and help the U.S. reestablish its leadership position which it’s held for decades,” said John Ciampaglia, CEO at Sprott Asset Management.
“We think the price has a lot more momentum to the upside based on this shift in sentiment that we’re seeing right now,” he added.
2 Uranium Mining Options
The executive orders is an encouraging sign for uranium miners as activity will be picking up. That said, the growth opportunity exits for the Sprott Uranium Miners ETF (URNM).
Uranium offers investors the ability to diversify their portfolios with commodities uncorrelated to traditional assets. URNM tracks the North Shore Global Uranium Mining Index that follows the performance of companies involved in the uranium mining industry. The index includes companies engaged in the mining, exploration, development, and production of the metal. It also includes those that hold physical uranium or uranium royalties. The index also invests in global firms that mine, develop, and produce uranium. For more pure-play exposure to uranium, URNM also invests in firms that hold the physical metal, or that derive royalties from it.
Looking under the hood of URNM, close to half of the fund is in small- and micro-cap holdings. The rest is diversified with mid- and large-cap companies. As such, URNM seeks to offer investors a mix of growth and stability. This diversification aspect allows the fund to capture future upside in small-cap and microcap companies. The fund also aims for more stable fundamentals inherent in mid- and large-cap companies.
For those who want to solely skew toward growth, consider using the Sprott Junior Uranium Miners ETF (URNJ) for even greater potential. URNJ tracks the total return performance of the Nasdaq Sprott Junior Uranium Miners Index. This index mixes up exposure to mid-, small-, and micro-cap companies.
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Past performance is no guarantee of future results. One cannot invest directly in an index.
Funds that emphasize investments in small/mid-cap companies will generally experience greater price volatility. Diversification does not eliminate the risk of investment losses. ETFs are considered to have continuous liquidity because they allow an individual to trade throughout the day. A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when Fund shares are held in a taxable account. These costs, which are not reflected in annual fund operating expenses, affect the Fund’s performance.
Sprott Asset Management USA, Inc. is the Investment Adviser to the ETFs. ALPS Distributors, Inc. is the Distributor for the ETFs and is a registered broker-dealer and FINRA Member. ALPS Distributors, Inc. is not affiliated with Sprott Asset Management USA, Inc. or VettaFi.
Exchange Traded Funds (ETFs): SETM, LITP, URNM, URN, COPP, COPJ, NIKL, SGDM and SGDJ
Physical Bullion Funds: PHYS, PSLV, CEF, and SPPP.
