URNM: ETF With Global Exposure In The Uranium Industry

The Sprott Uranium Miners ETF (URNM) provides concentrated global exposure to uranium miners and physical uranium, with 26 holdings.URNM has strong growth metrics and outperformed metals and mining benchmarks, but exhibits high volatility and irregular distributions.URNM is better suited for tactical allocation than for long-term investment due to high risk metrics.Its competitor URA shows better recent performance, liquidity, diversification, and lower fees.Quantitative Risk & Value members get exclusive access to our real-world portfolio. See all our investments here » Ole_CNX/iStock via Getty ImagesThe Sprott Uranium Miners ETF (URNM) was launched on December 3, 2019 and tracks the North Shore Global Uranium Mining Index. URNM has 26 holdings, a trailing 12-month yield of 2.54% and an expense ratio of 0.75%. Distributions are paid annually. It is a large and liquid ETF, with $2.4 billion of AUM (assets under management) and an average daily dollar volume of $69 million. The fund’s issuer Sprott is an asset management company headquartered in Toronto, Canada, with a focus on precious metals and critical materials investment strategies. Sprott also has merchant banking and resource lending services for natural resources companies.As described in the prospectus by Sprott, the underlying index targets exchange-listed companies that have a significant portion of their operations related to uranium. The index was revised in December 2025. Its main current rules are listed below. To be included in the index, companies must have at least:The index selects at least 25 constituents, relaxing some constraints if necessary. It is split in two parts:Companies are weighted separately in each part based on free-float market capitalization, with maximum limits of 20% in any constituent and 50% in aggregate in those weighting more than 5%. The index is reconstituted semi-annually and rebalanced quarterly. I will use as a benchmark a metals and mining index excluding gold and silver, represented by the iShares MSCI Global Metals & Mining Producers ETF (PICK).Based on company domicile, Canada is the heaviest country in the portfolio (60.5%), followed by Australia (18.3%), the U.S. (7.3%), Hong Kong (5.2%), Kazakhstan (4.8%) and the U.K. (3.9%).URNM geographical allocation (Sprott)The portfolio is very concentrated. Indeed, the top 10 holdings, listed in the next table, represent 80.8% of asset value and the heaviest position weighs 21.45%. A large share of the physical uranium part is allocated to a Canada-listed closed-end fund of the same issuer: Sprott Physical Uranium Trust (U.U:CA).TickerNameWeight%CCJCameco Corp.21.45UECUranium Energy Corp.11.55U.U:CASprott Physical Uranium Trust11.35PDN AUPaladin Energy Ltd.5.73DNNDenison Mines Corp.5.63NXENexGen Energy Ltd.5.28KAP LINAC Kazatomprom JSC5.25UUUUEnergy Fuels Inc.4.97DYL AUDeep Yellow Ltd.4.841164 HKCGN Mining Co. Ltd.4.73Compared to PICK, URNM has higher fundamental growth rates and is more expensive based on valuation ratios, as reported in the table below. Cash flow growth is especially impressive.URNMPICKPrice/book4.692.34Price/sales16.291.49Sales growth %2.64%-2.29%Cash flow growth %62.43%-8.57%Book-value growth %10.88%1.54%Data: FidelityThe portfolio composition and fundamental metrics are given as an example from March 11, 2026. They may have changed by the time you read this.URNM has outperformed PICK by almost 18% annualized between December 10, 2019 and March 11, 2026, with a higher risk measured by maximum drawdown and volatility.Total ReturnAnnual.ReturnDrawdownSharpe ratioVolatilityURNM550.63%34.93%-50.78%0.8246.55%PICK166.82%17.00%-46.45%0.6328.78%Data: Portfolio123Both ETFs did very well over the past 12 months, but URNM is the most impressive, 47.6% ahead of PICK.12 monthsTotal ReturnDrawdownSharpe ratioVolatilityURNM113.17%-23.84%2.0947.57%PICK65.55%-21.17%4.2415.65%URNM is uncompelling for dividend-focused investors: distributions have been very irregular, as plotted below.URNM distribution history (Seeking Alpha)The next table compares characteristics of URNM and five uranium ETFs. Some of them may include nuclear utilities and/or companies involved in the uranium supply chain:URNMURAURNJNLRNUKZURANInception12/03/201911/04/201002/01/202308/13/200701/23/202409/23/2024Expense Ratio0.75%0.69%0.80%0.56%0.85%0.35%AUM$2.38B$7.25B$452.04M$4.80B$835.29M$30.47MAvg Daily Volume$68.72M$301.39M$17.62M$90.26M$9.36M$597.54KHoldings285335254644Top 1080.80%65.19%77.80%57.65%42.84%45.81%Turnover35.00%15.00%38.00%42.00%23.00%52.00%Tot. Return*55.19%92.45%57.33%72.18%88.88%70.31%Annual.Return*35.69%57.56%36.98%45.84%55.52%44.74%Drawdown*-45.27%-37.81%-53.61%-30.48%-33.03%-31.96%Sharpe ratio*0.891.130.881.051.170.94Volatility*48.17%49.87%55.40%41.38%37.62%40.00%* Calculated with Portfolio123 from 10/1/2024 to match inception dates.URNM is in the third position for size and liquidity behind URA and NLR. It has the lowest (though very high) total return over the past 17 months. URA has the highest return, and NUKZ the best risk-adjusted performance (Sharpe ratio), due to lower volatility. Nonetheless, this time frame is too short to compare the long-term potential of these funds.URNM offers global exposure in the uranium mining industry, and to a lesser extent in the physical metal, with a concentrated portfolio of 25 stocks and a closed-end fund. URNM may be used as a long-term investment, but its high volatility makes it more compelling for tactical allocation and swing trading. Nonetheless, its competitor URA may be a better alternative, with better recent performance, higher liquidity, lower turnover, better diversification and slightly lower fees.This article answers these three main questions about URNM:Editor's note: This article is intended to provide a general overview of the ETF for educational purposes only and, unlike other articles on Seeking Alpha, does not offer an investment opinion about the ETF.Quantitative Risk & Value (QRV) provides you with risk indicators and data-driven, time-tested strategies. Get started with a two-week free trial now. This article was written byAnalyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). 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