A push towards renewable energy sources is bringing nuclear power back in consideration, causing hedge funds to place bullish bets on uranium.
“Funds such as Ben Melkman’s New York-based Light Sky Macro, Anchorage Capital and Tribeca Investment Partners have been positive on the outlook for the raw material, as a global energy crunch highlights the role of nuclear power in a transition away from fossil fuels,” a Financial Times article notes.
In the meantime, uranium prices are rising to levels not seen since almost a decade ago. The World Uranium Index is up 41% year-to-date, and more gains could be had through the rest of 2021.
“The price of raw uranium, known as yellowcake, rose to its highest level since 2012 at $50 a pound last month,” the Financial Times article says further. “The move has attracted new investors into the market for the first time since before the financial crisis, when buying by investors drove the price from $20 a pound to a record high of $136 a pound in June 2007.”
Those kinds of gains are opening the eyes of hedge funds, bringing institutional money to uranium price speculation.
“We’ve been patiently waiting for something to happen for a long time,” said Ben Cleary of Tribeca Investment Partners in Singapore. “Clearly there’s speculative money coming back into the sector, there were massive price moves in September.”
A Uranium Product to Consider
Investors don’t need to bring war chests of money like hedge funds to the uranium game. One fund to consider is the Sprott Physical Uranium Trust (U.U), which trades on the Toronto Stock Exchange.
U.U provides a secure, convenient, and exchange-traded investment alternative for investors interested in holding uranium. U.U comes with a 0.35% management fee.
“Uranium spot prices have been rising in 2021, in what we see as a strong new bull market,” Sprott notes on their website. “Investors are betting on nuclear energy’s profile as a highly efficient, reliable and clean energy source. Aggressive decarbonization goals worldwide are driving major policy shifts that are likely to bolster demand for uranium and nuclear energy.”
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