This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Uranium ETF for the Nuclear Trade

Over the years I've written articles about two different nuclear energy ETFs. First the Market Vectors Nuclear Energy Portfolio (NLR) in 2007 and then the PowerShares Global Nuclear Portfolio (PKN).

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 - Get Report) 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.
1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG
PKN $0.00 0.00%
URA $9.26 0.43%
XLF $24.66 1.17%
NLR $48.07 0.29%
CCJ $14.38 0.70%

Markets

DOW 17,739.60 +120.09 0.68%
S&P 500 2,075.74 +12.63 0.61%
NASDAQ 5,016.0140 +29.1470 0.58%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs