BNP Paribas’ THEAM Quant platform, in collaboration with BNP Paribas Exane Research, has launched the THEAM Quant – Nuclear Opportunities fund (“the Fund”) as they continue to develop their partnership on thematic products.
The Fund seeks exposure to companies involved in the Nuclear Energy value chain as it aims to capture a multi-decade investment opportunity, driven by growing global electricity demand and energy security concerns.
It tackles this sector by splitting 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.
The underlying long-only strategy employs the dynamic equity investment approach and systematic criteria of BNP Paribas Quantitative Investment Strategies (“QIS”) to enhance the Fund’s overall risk-return profile and diversification.
This process is based on a scoring system that combines the “human” element of in-depth fundamental analysis, with proprietary artificial intelligence (“AI”) model to enable large-scale scanning of companies’ activities, ultimately selecting stocks that maximise the portfolio’s relevance to the nuclear energy sector.
Robust financial performance filters are supplemented by its SFDR Article 8 classification as the Fund integrates ESG considerations to exclude companies involved in manufacturing nuclear weapons or breaching human rights, whilst maintaining a carbon footprint 20% below its initial investment universe.
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.
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.”
Roberto Bartolomei, Head of BNP Paribas Global Markets’ Sales for THEAM Quant Funds, said: “We believe nuclear energy offers compelling a long-term investment opportunity, given regulatory tailwinds and the extensive lifespan of these assets. IEA’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 role in addressing these pressures.
“Our investment process allows us to identify the companies that are best positioned to capitalise on these trends, as well as the future trajectory of this ecosystem. Through Exane’s thematic expertise and the structural advantages of our THEAM platform, we are pleased to able to offer a highly diversified product at the cutting edge of this investment opportunity.”