The global energy landscape is leaning towards an emphasis on security and sustainability. Because of this shift, the role of nuclear power has gone from a debated alternative to a strategic necessity.
“One of the areas where we’re really seeing a significant buildout is in nuclear energy,” said Steve Schoffstall, Head of ETFs at Sprott Asset Management, in an interview with Nasdaq.
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Nuclear Dependence Building
In the past, the reliability of nuclear power came into question as a viable energy alternative. That’s no longer the case today as renewable sources like wind and solar can no longer function in isolation.
“Nuclear energy provides reliable base-load power,” Schoffstall explains, emphasizing that it offers an “always-on electricity capability” that ensures grid stability irrespective of current weather conditions.
Furthermore, the geopolitical race to secure reliable nuclear energy sources is intensifying. Currently, the United States maintains its position as the world’s largest producer of nuclear power.
However, as Schoffstall noted, China is “quickly approaching”. As such, an aggressive infrastructure expansion that supports nuclear energy is a matter of national survival.
“One of the reasons why we see China building out nuclear capacity is because they are very energy dependent,” Schoffstall notes, pointing to the vulnerabilities underscored by global instability, “as has been all over the headlines with the ongoing conflict in Iran.”
ETF Opportunities
For investors and policymakers alike, energy security is synonymous with national security. As nations grapple with energy-dependent economies and volatile supply chains, nuclear energy is becoming a critical hedge.
By providing clean, alternative energy that is immune to the whims of Mother Nature and geopolitical friction, nuclear power is becoming the backbone of the next era of industrial growth. This expansive growth opportunity can be encapsulated in uranium miners.
In particular, investors may want to consider the Sprott Uranium Miners ETF (URNM) and the Sprott Junior Uranium Miners ETF (URNJ). The former provides a balanced pure-play approach with exposure to both physical uranium and large-cap miners. The latter is ideal for those looking for greater growth opportunities via small cap companies. URNJ targets small- and midcap explorers and developers. As regulations ease and new mines are incentivized by higher prices, these junior players are often the primary beneficiaries of merger and acquisition activity and discovery-led growth.
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Disclosures
An investor should consider the investment objectives, risks, charges, and expenses carefully before investing. To obtain a Prospectus, which contains this and other information, contact your financial professional or call 888.622.1813. Read the Prospectus carefully before investing, which can also be found by clicking one of the links below.
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, SGDJ, SLVR, GBUG, METL
Physical Bullion Funds: PHYS, PSLV, CEF, and SPPP.
Gold and precious metals are referred to with terms of art like store of value, safe haven and safe asset. These terms should not be construed to guarantee any form of investment safety. While “safe” assets like gold, Treasuries, money market funds and cash generally do not carry a high risk of loss relative to other asset classes, any asset may lose value, which may involve the complete loss of invested principal.
