The Betashares Global Uranium ETF (ASX: URNM) has been a great place to invest over the last 12 months.
Thanks to supply concerns and growing demand, the price of the chemical element has been surging. This has put a rocket under uranium stocks across the globe.
This includes companies held by the URNM ETF such as Boss Energy Ltd (ASX: BOE), Cameco Corp (NYSE: CCJ), NexGen Energy Ltd (NYSE: NXE), and Paladin Energy Ltd (ASX: PDN).
Supply concerns as demand grows
Last year, traders were bidding uranium prices higher and higher after the world's largest uranium miner, Kazatomprom, warned that it would fall short of its production targets.
This was being driven by shortages of sulphuric acid, which is a key ingredient in the production process for some uranium mills.
This couldn't have come at a worse time, with demand for uranium growing rapidly due to global governments seeing nuclear energy as a way to achieve key decarbonisation goals.
But it gets even better for the companies included in the Betashares Global Uranium ETF. In light of the above, SP Angel mining analyst John Meyer, believes that uranium prices could be on a very long upwards trajectory. According to Reuters, he said:
The market has been slowly building higher prices as mining costs rise and nuclear generators look to build stocks to guard against increasingly risky supply-side issues. We see prices rising year-on-year for next 10-20 years or till the world finds another source for large scale un-interruptible base load power with a low carbon footprint.
The World Nuclear Association was forecasting demand from nuclear reactors to be 65,650 tonnes of elemental uranium (tU) in 2023 and then almost double to 130,000 tU by 2040.
Investing $10,000 in the Betashares Global Uranium ETF URNM
If I had invested in the Betashares Global Uranium ETF a year ago, I would be smiling widely today.
During this time, the fund has absolutely smashed the market with a return many times the average for the period.
For example, if I had invested $10,000 into the URNM ETF in April 2023, I could have picked it up for $5.63 per unit. This means I could have snapped up 1,777 units for a total investment of $10,004.51.
Today, the Betashares Global Uranium ETF is fetching $9.81. This is 74.2% higher than the price I would have paid a year ago.
So, my 1,777 units would now have a market value of $17,432.37. That's a sizeable $7,427.86 more than my original investment in the URNM ETF after just 12 months. Impressive!
