This Day On The Street
Continue to site
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 Miners Dig Up Solid Returns

Editor's note: This piece originally ran earlier today on our newest Premium service, ETF Profits . Click here for a 14-day trial to this exciting product!

Nuclear energy ETFs recently jumped back into the spotlight with impressive gains. Chuck LeBeau wrote about nuclear ETFs last month, and covered the two comprehensive funds in the sector: PowerShares Global Nuclear Energy (PKN) and iShares S&P Global Nuclear Energy Index (NUCL). In addition to these, there are two other ETF options that offer significant exposure to the nuclear energy industry.

The Market Vectors Uranium & Nuclear Energy ETF (NLR) and the Global X Uranium ETF (URA) are both strong plays. NLR gained over 30% in the past six months and URA is up over 20% since it launched in November 2010. Those returns have far surpassed the returns of PKN and NUCL -- not surprising when you consider that PKN and NUCL are dominated by low-beta utility plays. In contrast, NLR and URA focus on miners, which have benefitted greatly from the recent surge in uranium prices from the mid $40s to roughly $70 per pound.

The story of uranium's rise is simple. First and foremost, commodities have been rallying since last summer, when the Federal Reserve first suggested that another round of quantitative easing (QE) could be in the pipeline. Though many investors focused on gold and oil, uranium actually outperformed both with gains of more than 55%.

Meantime, global warming issues and politics have spurred governments to invest billions of dollars into the nuclear sector to find "cleaner" energy sources. This has led to increased speculation that demand for the metal will soar in the future. According to the World Nuclear Association (WNA), more than 60 nuclear reactors are under construction in 15 different countries, with over 150 more on the way.

Having launched in August 2007, NLR was the first nuclear energy ETF to hit the market. NLR tracks the DAXglobal Nuclear Energy Index and holds 24 companies that are involved in various aspects of the nuclear power industry. About 40% of NLR is weighting towards uranium miners. NLR's top holding is Canada-based Cameco (CCJ), which makes up 8% of the fund. A behemoth in the nuclear energy industry, Cameco is one of the world's largest uranium miners. NLR is very liquid and, with over $290 million in assets under management, it is the largest nuclear energy ETF in the market. That said, URA is quickly catching up.
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
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
AAPL $93.74 0.00%
FB $117.58 0.00%
GOOG $693.01 0.00%
TSLA $240.76 0.00%
YHOO $36.60 0.00%


Chart of I:DJI
DOW 17,773.64 -57.12 -0.32%
S&P 500 2,065.30 -10.51 -0.51%
NASDAQ 4,775.3580 -29.9330 -0.62%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs