Uranium Investing 2025: URNM ETF's High Convexity Edge
Why a small URNM position (1-3%) could be reasonable for some investors...
Uranium is a small satellite position in my portfolio that I hold for its high convexity and lack of strong correlation with more dominant holdings (e.g. HPC hardware/semis, crypto, rolling T-bills, etc.).
Examples of 2 other primary satellite positions that I am considering adding in 2025 *ONLY IF CERTAIN CONDITIONS ARE MET* include: copper (COPX) and ITA + PLTR (I view as a pairing). Secondary considerations on a watchlist include: FNMA/FMCC, MP, VIX, KRBN, LIT — all a no-brainer skip right now.
There are many ways to get uranium exposure in 2025, including: spot uranium, single company stocks, diversified uranium ETFs, etc. I like URNM ETF (Sprott Uranium Miners ETF) because it avoids single company risk (30+ miners & 2 physical trusts).
DISCLAIMER: NOTHING HERE IS INVESTMENT OR FINANCIAL ADVICE. CONSULT A PROFESSIONAL IF YOU NEED HELP. JUST BECAUSE I OWN URNM DOES NOT MEAN IT IS AN IDEAL FIT FOR YOU AND/OR YOUR PORTFOLIO STRATEGY.
My goal is NOT to convince you to buy uranium — it may end up being a horrible satellite position. I’m simply sharing my thoughts/research.
I.) Uranium Market (May 2025): General Overview
1. Supply is relatively thin
Global exploration + mine-development budgets collapsed from roughly US $2 billion in 2012 to <$600 million by 2018 and have only clawed back to about $840 million in 2023.
Kazatomprom trimmed its 2025 production target by 5000 tU (~13 M lb.) in Aug 2024 citing sulphuric-acid shortages. (World Nuclear News)
After a decade of under-investment the project pipeline is skeletal, so any demand surprise forces prices higher.
2. Demand keeps climbing
The U.S. continues to operate 94 power reactors (440+ operate globally).
Another 66 reactors are under construction worldwide, adding ~80 GWe — most of it in Asia.
Even if U.S. demand stays flat, the Asian build-out alone could absorb ≈ 20 million lb of extra U₃O₈ a year by 2030.
3. Policy makes utilities forced buyers
The Prohibiting Russian Uranium Imports Act blocks Russian low-enriched uranium as of 11 August 2024 (one-year waivers expire in 2028). (Public Law 118-89 H.R. 1042)
On April 9, 2025 the Department of Energy awarded its first HALEU batches to five advanced-reactor developers, guaranteeing price-insensitive demand for higher-assay fuel.
4. Valuation is still attractive
Physical spot indicators put yellow-cake at about US $70 lb on 1 May 2025. (PRWeb)
Front-month COMEX futures (UX K25) last changed hands at US $69.65/lb on 9 May 2025. (TradingView)
The June 4, 2007 nominal high was US $136/lb—equivalent to ≈ US $210/lb in today’s money after CPI inflation. (CME Group, Uranium Info)
Prices today are therefore roughly one-third of the last cycle’s real peak, even though inventories are leaner and demand visibility stronger.
Takeaway: 2025 uranium combines manufactured scarcity (import bans, HALEU funding) with a decade-thin mine pipeline — a cocktail that could turn a small satellite slice into a portfolio’s unexpected hero.
II.) Uranium: Macro & Trump-Era Policy Context
1. The new economic team is pro-nuclear
Treasury. Scott Bessent was sworn in on 28 Jan 2025 and has made “energy-security supply chains” a pillar of his strong-dollar policy. (U.S. Department of the Treasury)
Commerce. Howard Lutnick runs a 10% “baseline” tariff wall, with surcharges up to 145% on China, and has promised that “critical-mineral deals will be carved out only for allies.” (Reuters)
CEA. Steve Miran’s April remarks framed advanced nuclear as a core “global public good,” giving political cover for larger DOE outlays. (The White House)
West-Wing trade shop. Peter Navarro, back as senior counselor, drives the tariff playbook and the new Section 232 investigations.
2. Section 232 probe keeps import risk on the table
An Executive Order of 15 Apr 2025 directed Commerce to examine whether imports of “processed critical minerals—including uranium” threaten U.S. security.
A final report is due in October and could recommend 5–25% tariffs or quotas on non-allied ore/concentrates. (Wiley, Federal Register)
3. Russian LEU ban is statutory, not a bargaining chip
The Prohibiting Russian Uranium Imports Act (H.R. 1042) was enacted on 13 May 2024; it bars Russian low-enriched uranium after 11 Aug 2024, with only narrow one-year waivers that expire in 2028. Repeal would require a new act of Congress, well beyond the White House’s unilateral reach. (Wikipedia)
Net policy signal: Tariffs may tighten upstream supply, while the LEU ban locks in downstream demand. Either outcome pulls in the same direction — higher Western uranium prices.
III.) 2025 → 2030: 4 Uranium Catalysts to Watch
1. The HALEU ramp
On 9 April 2025 the U.S. Department of Energy awarded its first batches of high-assay low-enriched uranium (HALEU) to five advanced-reactor developers—TRISO-X, Kairos, Radiant, Westinghouse and TerraPower.
Those allocations let the companies sign binding fuel contracts that could start shipping in late-2025. Because HALEU is enriched to 15-20% U-235 — roughly 2x the uranium content of today’s light-water-reactor fuel — every ton procured multiplies natural-uranium demand.
The next inflection point arrives in late June 2025, when DOE must decide whether to expand Centrus’s Piketon cascade from pilot to full commercial scale. (Energy.gov)
2. Small-modular-reactor (SMR) build-out
The Nuclear Regulatory Commission accepted TerraPower’s Natrium construction-permit application in May 2024, the first advanced-reactor CP docketed in more than forty years.
Non-nuclear ground-work at the Kemmerer, Wyoming site begins this summer. Once NRC issues a full construction permit — expected 2026-27 — the first small-modular-reactor (SMR) orders convert both HALEU and natural-uranium demand from “story” to signed purchase agreements. (American Nuclear Society)
3. Global reactor expansion
As of March 2025 the World Nuclear Association lists about 66 reactors under construction worldwide—≈ 80 GWe of new capacity, with China alone accounting for more than 20 GWe slated to start before 2028.
Each additional gigawatt burns roughly 450,000 lb of U₃O₈ per year, so the international build-out keeps a constant bid under the market all the way to 2030. (World Nuclear Association)
4. Hyperscaler power-purchase agreements
Big tech is starting to buy nuclear output directly. On 20 September 2024, Microsoft signed a 20-year PPA with Constellation that will see Three Mile Island-1 — mothballed since 2019 — restarted to supply 835 MW of carbon-free power for AI data-centre load.
The deal survives Microsoft’s February 2025 decision to cancel roughly 200 MW of third-party data-centre leases, underscoring that hyperscalers view baseload nuclear as strategic. Milestone PPA payments begin this year, with the plant targeted to return to the grid in 2028. (World Nuclear News, Data Center Dynamics)
Why they matter: The first two catalysts (HALEU contracts and SMR permits) are largely U.S. policy-driven; the third is an international build-out that proceeds whatever Washington does; the fourth adds a brand-new, price-insensitive buyer class. Any one of them can tighten an already thin supply stack—giving the uranium trade its high-convexity appeal.
IV.) Why a Small Position in Uranium?
High-convexity, low-correlation, and a very different macro driver-set are the three qualities you rarely get in the same asset. Uranium offers all of them.
High convexity. 4 independent levers can tighten the market:
The statutory U.S. ban on Russian low-enriched uranium,
A possible Section 232 tariff on non-allied ore,
The DOE’s HALEU build-out for advanced reactors, and
An 80 GWe international construction wave led by China.
Any single lever can push spot U₃O₈ toward three-digit prices, yet real downside requires an improbable one–two punch (deep recession and repeal of the Russian ban).
Low correlation. URNM’s three-year beta to the S&P 500 stands at roughly 1.4 and its rolling correlation at about 0.45; its weekly price spikes line up with fuel-cycle headlines, not with Fed dots or chip foundry earnings.
During the COVID quarter of 2020, spot uranium rose 32% while Brent crude collapsed 65% — a reminder that utilities buy fuel on long-dated contracts, largely indifferent to GDP prints.
Cleaner fit than other energy trades.
Solar-equipment stocks live and die by real-rate expectations and tax credits.
Oil-and-gas E&Ps swing with OPEC policy and short-cycle demand.
Uranium miners are driven instead by policy-mandated scarcity: a supply line that is both thin and, thanks to Western security concerns, increasingly ring-fenced.
In a tech-heavy portfolio a 1-3% URNM sleeve adds an “orthogonal” engine — upside that is unlikely to show up in growth equities or in risk-on tokens at the same time.
V.) Why URNM ETF vs. Other Uranium Investments?
Uranium exposure comes in 3 broad forms: miner baskets, physical trusts, and single-stock bets. Each has its own mix of leverage, cost, and deal-flow risk.
A. Miner baskets
Sprott Uranium Miners ETF (URNM). Roughly 83% of assets sit in producing or near-term miners; another 17% is parked in physical holders such as SPUT and Yellow Cake. That structure gives URNM a spot-price beta of about 0.5: every five-dollar move in U₃O₈ has historically moved the ETF 5-10%. Trading volume averages ≈ 475K shares a day, spreads are a penny wide, and the fund has a full U.S. options chain. Sprott cut the expense ratio to 0.75% in its December-2024 prospectus.
Global X Uranium ETF (URA). Only about 60% of URA is actually in miners; the rest is split among reactor builders and utilities. That dilutes its torque (β ≈ 0.3) and tethers it to the industrial cycle. Fee: 0.69%.
B. Physical uranium
Sprott Physical Uranium Trust (SPUT). Holds drums — 66 million lbs. at last count — so its price shadows spot almost one-for-one. Management fee 0.35%, storage and taxes push the all-in MER to ≈ 0.64%. The trust trades only in Canada (U-UN) and on the U.S. OTC board (SRUUF), lacks listed options, and its units can swing 5–10% above or below NAV in a single week.
C. Single names
Cameco (CCJ). World’s #2 producer with a long-dated contract book—but already trades above 25 × 2026e cash flow.
Centrus (LEU). Sole U.S. HALEU enricher; a binary bet on the DOE’s June decision.
NuScale (SMR). A licensing-stage SMR developer that needs a fresh anchor customer after UAMPS cancelled.
Why URNM wins the 1–3% sleeve (for me)
Purity with diversification. You get mostly upstream cash-flow leverage without the single-asset land-mine of betting only on CCJ or LEU.
Competitive cost for the torque delivered. URNM’s 0.75% fee is just six basis points above URA, yet its miner weight gives roughly 2x the price leverage to spot moves; SPUT’s nominally lower fee is often wiped out by premium/discount lurches.
True liquidity and risk-management tools. NYSE listing, tight spreads, and an options chain make it easy to scale in tranches and collar risk—advantages SPUT and most juniors lack.
No NAV whiplash. As an ETF, authorized participants arbitrage URNM back to NAV intraday. SPUT has no such mechanism and is presently trading about 8% below its underlying uranium.
Built-in “kicker.” The 17% slice in SPUT and Yellow Cake means you already have some pure-spot exposure inside the ETF.
When a different wrapper can make sense…
Expecting a brief spike above $120/lb? A small add-on to SPUT lets you ride the metal and flip it into the NAV premium window.
DOE green-lights full-scale HALEU and volumes triple? A tiny LEU position captures enrichment-margin upside.
Convinced long-dated utility contracting tightens the curve? Pair CCJ with URNM; Cameco wins the contracts, URNM captures junior beta.
Speculating on SMRs securing PPAs by 2027? A flyer in NuScale below 0.25% could make sense… or own URA, which already holds it.
For a U.S. investor who wants a rules-driven 1-3% satellite sleeve, URNM likely offers the best mix of spot leverage, competitive cost, liquidity, and diversification. Other vehicles are useful tactical add-ons once specific catalysts fire, but URNM alone captures most of the fuel-cycle upside without concentrating the bet on any single mine, contract, or fusion promise.
VI.) Probability-Weighted ROI Estimates for URNM (2025-2030)
This is mere speculation… you can do your own estimates as well. Think of the next ~5 years with 4 possible outcomes:
Base-case (40% odds). Growth muddles through, the Russian ban holds, and Commerce levies a modest 10% tariff on non-allied ore. That combination keeps spot around $100 per lb and would plausibly carry URNM to $75 — about a 15% CAGR from today’s level.
Bull or reflation boom (30% odds). Loose fiscal policy, a weaker dollar and fresh supply hiccups in Kazakhstan send spot into the $130–150 range. URNM, with miners’ operating leverage, can print $120‐plus, implying 25%+ CAGR.
Mild recession (20% odds). One year of negative GDP growth, no ore tariff, but the Russian ban survives. Spot fades to the mid-$80s and URNM settles somewhere in the mid-$60s, a 10-12% CAGR — still respectable.
Grand-bargain repeal (10% odds). A severe downturn and a new Act of Congress that re-opens Russian supply knock spot back into the $60s. URNM might drift to $45, a flat-to-low-single-digit outcome.
Weighting those scenarios produces an expected return of roughly 14–15% a year — probably better than the long-run 8-9% equity hurdle — while the worst credible path removes only about 20% of investment.
URNM’s historical elasticity is such that every $5 move in spot uranium changes its net-asset value by roughly 5-10%, and the ETF has added 8-10% in the week after each recent $5 spot jump (2021 and 2023 tape-runs).
VII.) How to Build a Uranium Sleeve in a Portfolio
Start small, scale only on hard news, and harvest gains early.
Sizing: Keep the uranium sleeve at 1-3% of total portfolio value. With URNM’s 30-day implied volatility around 41% and 90-day realized volatility near 48%, a 3% weight limits a full-blown 30% draw-down in the ETF to roughly 1% of overall equity — an annoyance, not a disaster. Daily liquidity is deep enough (≈ 475K shares on a 30-day average) that you can trade in or out with tight spreads.
Tranche plan
Starter stake: Buy 1% when URNM trades US $40 or below and physical spot uranium is under US $80/lb (today: US $37-38; spot ~US $78).
Second tranche: Add 1% if either (a) the Department of Energy confirms a full-scale HALEU contract with Centrus at the end of June, or (b) URNM closes above US $42 on volume; use a stop-limit (42.10 / 42.60) to avoid gaps.
Third tranche: Add 1% only if Congress’s FY-26 Energy-and-Water bill appropriates at least US $1.8 billion for HALEU in September–October and the ETF is still below about US $55.
Hard exit: If, after the appropriation vote, URNM sinks below US $32 for ten consecutive sessions or the Russian-fuel ban is formally repealed, close the sleeve and regroup.
Trim / rebalance: Review the position when URNM approaches US $60 (equivalent to spot uranium around US $100/lb) or once the gain on the first purchase exceeds 100%. At that point, sell half to lock in “house money” and trail a stop on the remainder.
VIII.) Uranium Risks & Monitoring
Policy risk: Congress could low-ball HALEU funding or—far less likely—repeal the Russian LEU ban. Follow House and Senate Energy-and-Water sub-committee mark-ups and C-SPAN whip counts; those calendars move the tape long before Wall Street models update.⁴
Tariff risk: The Section 232 investigation on critical-mineral imports is due in October. If Commerce recommends a 0% duty on non-allied ore, expect a knee-jerk sell-off. Watch Federal Register docket BIS-2025-0009 for the press release.
Macro shocks: A liquidity crunch will drag all small-cap resources. Set alerts for VIX above 25 and for URNM’s implied volatility spiking past 60%.
Execution delays: If Centrus misses HALEU milestones or NRC slips SMR construction permits into the 2030s, sentiment will tumble. Subscribe to the DOE “HALEU Availability” RSS feed and the NRC licensing dashboard; both post updates before the mainstream press notices.
Spot-price downdrafts: Should Kazakhstan restore curtailed tonnage and spot uranium fall below US $60/lb, be ready to cut size. A TradingView alert on the UX1! continuous future does the job. (Monitor Kazatoprom production updates)
Final Thoughts: URNM Portfolio Sleeve
Uranium makes sense as a small position in my portfolio.
A statutory ban removes one-quarter of historic U.S. fuel supply on 11 August 2024.
A looming tariff probe could tighten raw-ore imports just as Kazatomprom trims its own guidance.
DOE has already written the first HALEU cheques, and the rest of the world is still pouring concrete for 80 GWe of new reactors.
Any one lever can push spot back toward triple digits, yet true downside requires a deep recession and new legislation to restore Russian supply.
A 1-3 % URNM sleeve captures potentially asymmetric payoff with:
Higher torque than URA,
Far less premium/discount chaos than SPUT, and
None of the single-asset blow-up risk that haunts CCJ, LEU, or SMR.
The trade plan is mechanical: buy cheap, add only on catalysts, trim early, respect the hard exit.
Hold it lightly, size it small, and let Washington do the work. If none of the catalysts fire, the sleeve is expendable; if even one lands, the convexity does what we wanted it to do.