BNP Paribas’ THEAM Quant platform, in collaboration with BNP Paribas Exane Research, has launched the THEAM Quant – Nuclear Opportunities fund, seeking exposure to companies involved in the nuclear energy value chain.
Aiming to capture “a multi-decade investment opportunity” driven by growing global electricity demand and energy security concerns, the SFDR Article 8 fund splits the investment universe into three pillars – nuclear fuel, including uranium mining and enrichment; energy generation, including power plant operations and technologies; and specialised engineering or related services.
Also read: Uranium and the future of energy
Vincent Berard, head of BNP Paribas global markets’ product strategy for THEAM Quant Funds, said: “Developing a dedicated nuclear energy strategy was a natural extension of our research into the global energy transition for the previous THEAM Quant – New Energy Opportunities fund. We realised an untapped opportunity to deepen the initial investment universe beyond the somewhat limited scope of public market indices and existing products on the market.
“These tend to be heavily concentrated on uranium miners, essentially correlating investment returns with uranium prices, which ultimately under-represents this sector’s full investment potential. This is why we chose to take a much more diversified view of the entire value chain, which promises higher returns within traditional portfolios.”
Investment approach
To attempt to enhance the fund’s overall risk-return profile and diversification, the underlying long-only strategy employs the dynamic equity investment approach and systematic criteria of BNP Paribas Quantitative Investment Strategies (QIS). This process is based on a scoring system that combines the ‘human’ element of in-depth fundamental analysis, with a proprietary artificial intelligence model to enable large-scale scanning of companies’ activities, ultimately selecting stocks that maximise the portfolio’s relevance to the nuclear energy sector.
The fund also integrates ESG considerations to exclude companies involved in manufacturing nuclear weapons or breaching human rights, while maintaining a carbon footprint 20% below its initial investment universe.
Meanwhile, its global allocation universe covers approximately 3,000 liquid companies across three main regions – Europe, North America and Asia – weighted through quantitative optimisation and quarterly rebalancing.
Roberto Bartolomei, head of BNP Paribas global markets’ sales for THEAM Quant Funds, added: “Nuclear energy offers a compelling long-term investment opportunity, given regulatory tailwinds and the extensive lifespan of these assets. The International Energy Agency’s Announced Pledges Scenario projects a 130% increase in global demand for electricity by 2050. Combined with a move away from fossil fuels, nuclear energy is set to play a crucial in addressing these pressures.”
