The uranium sector is booming thanks to skyrocketing spot prices. What are the investment options?
The post Is there a uranium ETF listed on the ASX? appeared first on The Motley Fool Australia. –
Uranium stocks are going nuclear as the industry booms from surging spot prices.
According to S&P Global, uranium spot prices rose sharply to a 9-year high of US$48/lb on Wednesday.
But for Australians looking for investment exposure in the energy metal, good luck trying to find an ASX exchange-traded fund (ETF) that focuses on uranium.
Why isn’t there an ASX uranium ETF?
Uranium is a far less popular commodity than the likes of resources such as iron ore, copper or gold.
As a matter of fact, the energy metal doesn’t even trade on an open market. Buyers and sellers typically negotiate contracts privately.
For investors looking to gain uranium exposure on the ASX, the most realistic option is to invest in individual energy companies.
The largest ASX-listed uranium player is Paladin Energy Ltd (ASX: PDN). The $2.7 billion company operates the “globally significant” Langer Heinrich Mine in Namibia. In March, Paladin Energy successfully raised $192.5 million to clear debt and pave the way to restart its uranium operations.
Paladin Energy and Energy Resources of Australia are arguably the most established uranium companies on the ASX. However, there’s a number of emerging players and explorers to also choose from.
Boss Energy Ltd (ASX: BOE) is a $700 million uranium explorer operating the Honeymoon uranium project in South Australia. The company is looking to ramp up exploration activities to drive a final investment decision for Honeymoon in the next 12 months.
While there isn’t exactly a diversified ASX uranium ETF, there are certainly a number of companies operating at different stages of the exploration and production lifecycle to investigate.
What about international markets?
The Global X Uranium ETF is listed on the New York Stock Exchange and provides investors access to a broad range of companies involved in both uranium mining and the production of nuclear components.
Another major uranium ETF is Sprott’s Physical Uranium Trust, listed on Canada’s Toronto Stock Exchange. The trust is the world’s largest actively managed uranium fund that provides investment exposure to physical uranium.
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Motley Fool contributor Kerry Sun has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.