Up 100%: Are ASX uranium ETFs worth a look today?

Is it too late to buy uranium ETFs on the ASX?

| More on:
A miner stands in front of an excavator at a mine site.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

One of the biggest trends on the ASX in recent months has been the rise of ASX uranium shares. Uranium miners like Boss Energy Ltd (ASX: BOE) and Paladin Energy Ltd (ASX: PDN) have surged in value recently, thanks to a massive spike in the cost of uranium. But what about ASX uranium ETFs?

Like many commodities, the ASX hosts a few exchange-traded funds (ETFs) that are designed to give investors exposure to the uranium niche.

One such fund is the BetaShares Global Uranium ETF (ASX: URNM). URNM units have been a fantastic investment in recent times. Just today, this ETF hit a new all-time record high of $10.96 a unit. The fund is also up more than 100% since March 2023.

This ETF works by holding an underlying portfolio of companies that are all involved in the production, stockpiling and distribution of uranium fuel. URNM holds both Boss Energy and Paladin in its portfolio, but its largest holdings are the likes of Cameco Corp, Sprott Physical Uranium Trust and Nexgen Energy.

Another ASX uranium ETF is the Global X Uranium ETF (ASX: ATOM). This fund is almost identical to URNM, even down to sharing an annual management fee of 0.69%. It holds very similar companies within its portfolio and also offers exposure to all things uranium.

Are ASX uranium ETFs worth investing in today?

If you are looking for some exposure to uranium companies but with a diversified risk base, then one of these ASX uranium ETFs might be a good fit.

However, I would throw in a caveat. Remember, uranium stocks and by extension, these ETFs have already had a stunning 12 months or so. If uranium prices (which are already at multi-year highs) continue to surge, then we could well keep seeing some stonking gains here. But that's a big if. If uranium eventually returns to its historical levels, these ETFs could come off the boil quickly.

So in this way, you are effectively making a bet on the future of a volatile commodity price by investing in one of these funds. That's not the way I usually invest, and it's not something I would recommend to any investor without an in-depth understanding of the global uranium market.

Motley Fool contributor Sebastian Bowen 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 recommended Betashares Global Uranium Etf. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on ETFs

Woman in a hammock relaxing, symbolising passive income.
ETFs

3 reasons why the Vanguard Australian Shares High Yield ETF (VHY) is a top buy for passive income

This fund is expected to pay significant dividend income in the coming year.

Read more »

Diverse group of university students smiling and using laptops
ETFs

5 ASX ETFs for beginners to buy in June

Let's see why these funds could be great options if you're starting your investment journey.

Read more »

A man activates an arrow shooting up into a cloud sign on his iPad.
ETFs

How can ASX investors gain exposure to cloud computing?

This ETF allows investors to buy a slice of 'the cloud'.

Read more »

Cybersecurity professional man inspects server room and works on iPad.
ETFs

$10,000 invested in HACK ETF a year ago is now worth…

This exchange-traded fund seeks to capitalise on growing global demand for cybersecurity services.

Read more »

A group of men in the office celebrate after winning big.
ETFs

Which 3 thematic ASX ETFs have surged between 20% and 50% since April?

These 3 ASX ETFs have beaten the market by a substantial margin.

Read more »

A graphic illustration with the words NASDAQ atop a US city and currency
ETFs

Why NDQ ETF and these ASX ETFs could be top buys in June

Let's see why these funds could be top picks for investors with money to put into the market.

Read more »

A woman holds a soldering tool as she sits in front of a computer screen while working on the manufacturing of technology equipment in a laboratory environment.
ETFs

Looking for diversified exposure to Nvidia shares after its result? Buy this ASX ETF

Nvidia delivered another impressive earnings result this week.

Read more »

ETF with different images around it on top of a tablet.
ETFs

I think it's a great time to invest in this top ASX ETF

This fund offers the potential for strong returns, in my opinion.

Read more »