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Sept. 9, 2021, 1:16 p.m. EDT

Why uranium ETFs are going nuclear — almost literally — and how that trend might persist

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By Mark DeCambre

Hi, there! The most scintillating news on the exchange-traded fund beat may be what one of our colleagues at MarketWatch reported earlier this week. Basically, a Canadian fund is buying uranium to store it — and keep it out of the hands of the nuclear power plant operators who need it. We’ll touch on that a little.

Meanwhile, Japan ETFs are on fire (see attached table) thanks, perhaps, to Yoshihide Suga, who said Sept. 3 that he was stepping down as prime minister after criticism of his handling of COVID-19. 

You know what to do:  Send tips, or feedback, and find me on Twitter at @mdecambre to tell me what we need to be jumping on.

Sign up here  for ETF Wrap.

A boom in uranium ETFs

Uranium funds are enjoying boom times. Notably, the Global X Uranium ETF has surged some 19% in the weekly period tracked by ETF Wrap. The ETF, which is the largest in the uranium segment, is up 15.3% so far in September and boasts a nearly 58% year to date advance, according to FactSet data.

Meanwhile, the North Shore Global Uranium Mining ETF /zigman2/quotes/215396693/composite URNM -3.84% is up 21% so far in September and has climbed 77% thus far in 2021.

What’s behind the surge? A dearth of uranium, MarketWatch’s Steve Goldstein reports, a fact that also has delivered a jolt to other uranium ETFs pegged to the radioactive element that is used as a source of alternative energy.

Uranium futures, which were introduced on the New York Mercantile Exchange and CME around 2007, were trading above $40 a pound on Thursday, after breaching that price for the first time in six years earlier this week. Futures boasts a 34% gain in the year to date and a 16% rally in the month to date.

Goldstein says the Toronto traded Sprott Physical Uranium Trust is reportedly hoovering up uranium, citing comments from Harris Kupperman, the president of hedge fund Praetorian Capital, to RealVision .

Some speculate that fundamental demand factors are also behind the surge in uranium and ETFs, particularly as energy costs have been elevated against the backdrop of supply-chain bottlenecks that have emerged in a COVID world.

Read: Chatter about a ‘commodity supercycle’ is dying down—here’s why the debate isn’t over

Earlier this year, analysts at Morgan Stanley and BMO Capital Markets forecast that uranium prices could hit $50 a pound by around 2024.

At the current pace, uranium futures may well hit $50 by the end of 2021.

Weekly wrap

Top 5 gainers of the past week %Return
Global X Uranium ETF /zigman2/quotes/201570425/composite URA 19
KraneShares CSI China Internet ETF /zigman2/quotes/205873167/composite KWEB 7.5
iShares Currency Hedged MSCI Japan ETF /zigman2/quotes/208320118/composite HEWJ 6.3
Global X Robotics & Artificial Intelligence ETF /zigman2/quotes/205896633/composite BOTZ 6.1
iShares MSCI Japan ETF /zigman2/quotes/201162210/composite EWJ 6.1
Source: FactSet, through Wednesday, Sept. 8, excluding ETNs and leveraged products Includes NYSE, Nasdaq and Cboe traded ETFs of $500 million or greater
Top 5 decliners of the past week %Return
iShares U.S. Aerospace & Defense ETF /zigman2/quotes/207320401/composite ITA -2.0
VanEck Rare Earth/Strategic Metals ETF /zigman2/quotes/205602686/composite REMX -2.0
SPDR S&P Insurance ETF /zigman2/quotes/205505650/composite KIE -1.9
iShares Latin America 40 ETF /zigman2/quotes/204501189/composite ILF -1.9
SPDR S&P Aerospace & Defense ETF /zigman2/quotes/203252291/composite XAR -1.9
Source: FactSet
US : U.S.: NYSE Arca
$ 69.86
-2.79 -3.84%
Volume: 241,099
Jan. 18, 2022 4:00p
US : U.S.: NYSE Arca
$ 22.03
-1.01 -4.38%
Volume: 2.33M
Jan. 18, 2022 4:00p
US : U.S.: NYSE Arca
$ 36.35
-0.86 -2.31%
Volume: 18.37M
Jan. 18, 2022 4:00p
US : U.S.: NYSE Arca
$ 39.01
-0.48 -1.20%
Volume: 191,376
Jan. 18, 2022 4:10p
US : U.S.: Nasdaq
$ 31.23
-0.95 -2.95%
Volume: 867,355
Jan. 18, 2022 4:00p
US : U.S.: NYSE Arca
$ 66.17
-1.06 -1.58%
Volume: 8.10M
Jan. 18, 2022 4:00p
US : U.S.: Cboe BZX
$ 106.69
-1.39 -1.29%
Volume: 246,628
Jan. 18, 2022 4:00p
US : U.S.: NYSE Arca
$ 112.19
-2.81 -2.44%
Volume: 168,731
Jan. 18, 2022 4:10p
US : U.S.: NYSE Arca
$ 40.68
-0.65 -1.57%
Volume: 807,465
Jan. 18, 2022 4:10p
US : U.S.: NYSE Arca
$ 24.64
-0.17 -0.69%
Volume: 2.38M
Jan. 18, 2022 4:00p
US : U.S.: NYSE Arca
$ 116.37
-2.02 -1.71%
Volume: 54,065
Jan. 18, 2022 4:10p
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