Atlant Green Tech Metals: January’s Top Fund Fueled by Uranium & Nuclear Energy

Atlant Green Tech Metals posted an 18% gain in January, making it the best-performing fund of the month. The fund’s success was driven by surging precious metals prices, particularly gold and silver, which reached record highs before a slight pullback at month’s end.

Mattias Gromark, the fund’s portfolio manager at Atlant Fonder, said the significant rise in precious metals was the primary catalyst for the fund’s strong start to the new year. “It was like looking at meme stocks or crypto, purely in terms of price and flows,” he stated.

Uranium Companies

Prior to the recent surge, Atlant Green Tech Metals had already climbed 46% throughout the previous year. The fund focuses on sustainable material supply and invests in companies involved in metals and other materials crucial for the green energy transition. This performance underscores growing investor interest in the materials needed for a sustainable future.

The fund’s portfolio is evenly weighted across three segments: raw materials like uranium and copper, operating companies that service raw material extraction, and processing companies further along the value chain.

Its largest holding, acquired approximately four months ago, is London-listed Yellow Cake. The company primarily purchases uranium from Kazakhstan-based uranium miner Kazatomprom, which is then stored with uranium suppliers Orano and Cameco. Cameco is also held as the fund’s second-largest investment.

“In October, we saw a very strong increase in uranium producers. The underlying companies are often more volatile than the raw materials themselves. The companies vary considerably, and after the increase, I decided to broaden the portfolio a bit, which led to the purchase of Yellow Cake,” Gromark explained.

Nuclear Power Before Solar and Wind

With Yellow Cake and Cameco in its portfolio – and an additional nine companies working on uranium development and exploration – the fund has significant exposure to nuclear power. The fund’s focus on nuclear energy reflects a growing acceptance of its role in sustainable energy solutions.

Mattias Gromark estimates that approximately one-quarter of the portfolio is allocated to nuclear power.

Since 2022, nuclear power has been classified as a sustainable investment within the EU taxonomy.

“I have chosen nuclear power as a pillar for the energy of the future,” said the portfolio manager.

“Wind and solar power, however, are not something I am pursuing. Partly because I don’t believe it’s the best energy investment, and partly because it’s already dominated so much by China.”

Nuclear power is a politically sensitive topic with opposition in both the Swedish parliament and the EU. However, last summer, Germany began to consider EU support for nuclear power, albeit only for new nuclear technologies like small modular reactors.

“India and China are leading the nuclear race, but the US recently reached an agreement to build new nuclear power plants,” Gromark said.

Last October, the US government partnered with Cameco, Westinghouse, and Brookfield to invest $80 billion in new reactors.

“So, it will be built in the West as well.”

Fast-Moving China

The fund focuses on the energy transition in the West and completely excludes operations in China or other authoritarian regimes. This strategic decision reflects a focus on geopolitical risk and ethical investment practices.

At the same time, China is expected to account for nearly 50% of global electricity demand by 2030, according to recent estimates from the International Energy Agency (IEA). The country’s increased electricity demand is expected to be met by renewable energy and nuclear power.

China is already building nuclear reactors faster than any other country and is expected to account for approximately 40% of the global increase in nuclear power by 2030.

“We are definitely missing crucial investments by not being there,” Gromark said.

“But I think it’s only a matter of time before the West catches up. Then you have to remember that it’s not just about the big reactors. I think we will see many more exciting applications, from container-sized reactors to nuclear power for district heating.”

Expensive Companies

Atlant Green Tech Metals was established in 2021 through a restructuring of what was previously Atlant Precious. And the companies Mattias Gromark invests in are not cheap.

The portfolio includes Epiroc and Atlas Copco with P/E ratios of over 32 and 35, respectively, on a trailing twelve-month basis.

“It’s about finding the best companies in their niche and where you can still benefit from growth. I usually look at who dominates the sector,” the portfolio manager explained.

“Growth doesn’t happen overnight. There are deposits that need to be processed and so on. It can also be difficult for the market to know where to see growth in the long run.”

Nuclear Power Fund

Gromark does not use any benchmark index for the fund and justifies the decision by stating that there is nothing good to compare it to. However, he compares the fund to a few similar ones: Handelsbanken Hållbar Energi and Swedbank Robur New Energy.

Over the past year, the Atlant fund has outperformed the two with ease, but over three years, Swedbank is leading.

“I think we are more in the right niche and can deliver slightly different results,” Gromark said.

His fund has approximately 4,000 owners, compared to Handelsbanken’s and Swedbank’s with tens of thousands each.

Should you launch a dedicated nuclear power fund?

“That would be very intriguing.”