Share-split context: A forward split was recorded on Dec 21, 2022 with coefficient 2. A forward split turns each old share into multiple new shares and lowers the quoted price per share proportionally. Proportional ownership is unchanged at the split moment, so the split itself creates neither a gain nor a loss. The price-return figures in this report are already split-adjusted.

ETF Education Report: Sprott Uranium Miners ETF (URNM)

What this ETF is trying to do

The Sprott Uranium Miners ETF (URNM) is an exchange-traded fund that focuses on companies involved in uranium mining. Based on its Top Holdings, the fund invests in various companies like Cameco Corp, Sprott Physical Uranium Trust, and Nexgen Energy Ltd. These holdings represent a portion of the fund's total portfolio, which includes 29 different holdings. Please note that holdings can change over time.

What the numbers show

When looking at an ETF, it is important to understand two different types of returns: price return and total return. Price return only tracks how much the share price moves. Total return includes both the price movement and any cash distributions paid out to investors.

Here is what the data shows for URNM:

• Year-to-Date (YTD): The YTD price return is approximately -12.79%. The YTD total return is also approximately -12.79%.

• One-Year: The one-year price return is approximately -22.00%. However, the one-year total return is approximately -19.44%.

• Three-Year: The three-year price return is approximately 5.65%, while the three-year total return is higher at approximately 16.33%.

• Five-Year: The five-year total return is approximately 42.94%.

This ETF has a history of forward splits. In a forward split, each old share becomes multiple new shares. This causes the quoted per-share price to fall proportionally, but it does not change how much of the fund you own.

Income and distribution explanation

Some investors look for "yield," which is the cash an ETF pays out. URNM has a distribution yield of approximately 3.64%. The trailing distributions are approximately 1.74. These payments happen on an irregular or less frequent basis. It is important to remember that a high distribution yield does not guarantee that an investor will earn that same percentage as a total return.

NAV erosion explanation

"NAV erosion" refers to a decline in the Net Asset Value (the actual value of the assets held by the fund). While a falling share price is a "share-price decline," it does not always mean the NAV has declined.

For URNM, the erosion-risk score is 55, which is labeled as "Moderate price erosion." This is a measurement of risk, not a confirmed fact that the fund's value has been destroyed. There is no severe erosion-risk flag for this ETF.

Pros

• The fund has shown a positive total return over the three-year and five-year periods.

• It provides exposure to a specific sector (uranium mining) through many different companies.

Cons

• The fund has experienced a share-price decline over the last year.

• The distribution frequency is irregular, meaning payments may not happen on a set schedule.

Beginner takeaway

When studying URNM, remember that price returns and total returns are different. While the share price may go down, the total return accounts for the cash distributions paid to you. Always look at both numbers to get a full picture of how an ETF is performing.