URA has had phenomenal success, attracting more than $215 million in assets under management since its launch in November 2010. It tracks the Solactive Global Uranium Index and holds 24 companies involved in uranium mining. Investors should be aware that URA's top three holdings carry a 43% weighting, with almost 20% going to Cameco. URA is also the most liquid ETF within the nuclear energy space and has an average daily dollar volume of over $5.5 million.
NLR and URA are considered high-beta plays on the nuclear energy sector and will be more volatile than PKN or NUCL. In yesterday's broad-market selloff, URA dropped 5.5% while NUCL dropped only 2.7%. The underlying holdings in NLR and URA also make the funds more vulnerable to volatility in uranium prices.
Even with the risks, NLR and URA garner tremendous investor attention. PKN and NUCL may provide more cushioning in a down market due to their broader exposure, but if the global economic recovery accelerates, and uranium prices continue their latest uptrend, expect URA and NLR to continue their outperformance. For nuclear energy bulls looking to juice their returns and ride the current commodity gravy train, URA and NLR may be the way to play nuclear energy.
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