BetaShares to list uranium and solar ETFs on ASX

BetaShares says the products will allow investors to cash in on a boom in demand for alternative energy sources without fearing the volatility of the individual companies.

The construction site of the Hanhikivi 1 nuclear power plant in Finland. BetaShares predicts a surge in demand for uranium. Picture: Vesa Moilanen/AFP

The proliferation of exchange-traded funds is set to continue with BetaShares, one of the largest providers in the country, to launch products covering the solar and uranium sectors.

They would be the first ETFs in Australia to offer investors specific exposure to the alternative energy sources, and follow the launch of the first crypto-asset funds.

BetaShares says the two funds – the Solar ETF and Global Uranium ETF – will reduce stock-specific and geographic risk compared with investing directly in individual companies, particularly important given the volatile nature of the projects.

The International Energy Agency forecasts solar energy to grow from around three per cent of the world’s power mix to some 30 per cent by 2050 as country’s aggressively pursue net zero emissions goals. Power from nuclear energy is also expected to double in that time.

Alex Vynokur, the BetaShares chief executive, said the Solar ETF would “offer investors exposure to a portfolio of leading companies that are making solar energy more accessible, reliable and a part of the globe’s power grid”.

“Importantly, it is suitable for investors who wish to ensure their portfolios include ethical and responsible exposures,” he added.

“The global market for uranium is currently in a substantial supply-demand deficit driven by increasing acceptance of nuclear energy as a safe, reliable and low-carbon energy source.”

“It’s clear that uranium has an important role to play in maintaining the world’s energy security, as well as acting as a bridge and complement to renewable energy solutions.”

Both ETFs are expected to list on the ASX in June.

Australian uranium stocks have had a rollercoaster 12 months. Paladin Energy, with a market value of $2.14bn, has seen its shares rise 37 per cent in that time, although they have fallen more than 23 per cent since the start of the year.

Smaller companies, like the ASX-listed Lotus Resources, which has a controlling interest in a uranium mine in Malawi, has seen its share price rise more than 44 per cent in 12 months.

It is down some 19 per cent since December 31.

Globally, there are a number of uranium-focused ETFs including the Global X Uranium ETF listed in New York – with net assets of $US1.6bn ($2.3bn) – and VanEck’s Uranium+Nuclear Energy ETF, which has net assets of $US48.8m.

BetaShares has a number of other ESG-focused ETFs including its sustainability leaders diversified bonds product, but that does not have any exposure to uranium or nuclear energy.