In a Swedish podcast episode, we discussed the potential for uranium, and other ways to gain exposure to rising energy needs, with minimal environmental impact.

The conversation veered into truly explosive investment alternatives, like royalty streaming company URC and junior uranium exploration company GoviEx Uranium. And Forsys Metals as well as Aura Energy.

Investing in Uranium

Please note that these are speculative investments in small cap companies that currently do not have any profitable operations. Therefore, do your own analysis before risking capital in these or similar companies.

The podcast conversation primarily got me thinking about exciting, high-octane investments, rather than just the energy and environmental theme. However, my own investment portfolio was already heavily tilted towards real assets like gold and Bitcoin, hence various forms of nuclear power exposure could fit perfectly there.

Why Might Investing in Uranium Be a Good Idea?

Because the price of uranium could rise significantly in the coming five years, which could lead uranium stocks to increase by much more than that. This happened during the last supercycle (2007).

In that case, it may be wise to have exposure to uranium as a small uncorrelated part of your portfolio.

Arguments For and Against Investing in Uranium

The best argument is that the uranium sector only has a market cap of $40 billion. If 1% of ESG funds’ capital were rotated into investing in uranium, it could easily triple the market capitalization of all uranium stocks. This is not unlikely, considering that nuclear power provides the world with sustainable, clean, and reliable energy required to meet environmental requirements.

The counterargument is that it may take a long time before the price of uranium rises further.

How Do I Invest in Uranium?

The easiest way is to buy the ETFs URA or URNM, which will give you broad exposure to the uranium sector with low effort. Experts consider URNM to be the better ETF, if you were to choose only one.

Another option is Sprott Physical Uranium (SPUT) or Yellow Cake – if you only want exposure to the physical commodity (without company risk from stocks).

If you want to take slightly higher risk for better returns, you can buy royalty company URC – Uranium Royalty Corporation. They own a kind of call options contracts on large amounts of uranium and invest in the uranium sector.

If you want to take more risk, spend more time, and do some research, you can invest in miners and explorers

Reading tip: Reddit Uranium Squeeze

There is a lack of easily tradeable certificates and stocks for those who want to invest in Uranium. Ideally, I would like to find a pure uranium product, for example, for the spot price, or for a collection of junior companies, but perhaps you can’t get everything you want.

What Percentage of Your Portfolio Should You Have in Uranium?

The easy answer is: As much as you are willing to lose or be exposed to over several years.

A more nuanced alternative perspective is: If you believe our analysis that uranium can give you 5x returns, and you allocate 5% of your portfolio to it over the next year, it could result in 25% points of additional total return, while you, for example, have the remaining 95% of your portfolio in safer asset classes or stocks.

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