Both funds cover plant builders, utilities and uranium mining stocks. In both articles I laid out a fairly straightforward, long-term thesis that many countries are going to increase their use of nuclear energy which will require several hundred more plants and more uranium. I cautioned that there would be a lot of volatility and that investors would either need patience or need to employ a tactical strategy for trading.
One of the drawbacks of the indexes underlying both funds was the extent to which they had exposure to Japanese industrial stocks -- the companies that design and build many plants. This is a big negative for using these funds as I have little to no faith in Japan as an investment destination.
I think a better way to go is through uranium and now there is a pure play fund with the Global X Uranium ETF (URA). Regardless of where nuclear plants are built and who builds them, they will all need uranium and the increased demand that comes from new plants creates upward pressure on the price helping all the mining companies like the ones in the new ETF.Because Global X Uranium is very much a niche fund, it is very concentrated. The largest holding is Cameco (CCJ) at 20% of the fund. It is difficult to imagine the fund taking off without Cameco which has struggled in the last couple of years due to flooding problems at its Cigar Lake mine but has done much better in recent weeks. Other large holdings include Paladin Energy (PALAY) and Uranium One (SXRZF), each weighing in at close to 12% of the fund. There are 23 holdings in all. At the country level the fact sheet shows only four countries: Canada, 50%; Australia, 31%; the U.S., 13%; and the UK 4.75%, but that may not be quite right. For example the entire weight for the UK is Kalahari Minerals PLC (KMPLF) which is listed in London but mines various resources out of Namibia. I would note that far from being a negative, I think the Namibian exposure serves to make the fund more interesting.
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