3 Uranium ETFs That Pack a Nuclear Punch

Digital rendition of Uranium symbol on periodic table

(Image credit: Getty Images)

last updated 8 February 2024

Nuclear energy is soaring in popularity and putting uranium ETFs back on the map – and I think we can all guess why.

If you guessed the 2023 release of Oppenheimer … no. Run a few laps and do some self-reflection.

No, it's a confluence of several real-world developments: Growing electricity demand. A search for greener power sources to replace the likes of oil and coal. And, over the past couple of years, a clear reminder for several countries that they'd be best served becoming energy-independent from Russia.

For instance, in March of last year, France's parliament voted in favor of President Emmanuel Macron's nuclear investment plan – part of a $56 billion initiative that would see six new reactors built. A month later, Finland finally saw its long-delayed Olkiluoto 3 reactor start regular production.

Even Japan, which swore off nuclear power after the 2011 Fukushima disaster, approved a policy in 2023 that will extend the operations of existing reactors and allow new reactors to be built.

These are among numerous long-term drivers – but they're not the whole story behind the rapid rise in uranium prices, which have more than tripled over the past three years ago and are up more than 16% for the year-to-date in 2024. Much of uranium's buoyancy can be chalked up to rising demand, yes, but also constrained supply. Years of low prices forced many smaller uranium miners to shut down or throttle down production, and larger miners have spent precious little in capital expenditures to improve their operations.

Nonetheless, the horizon continues to brighten for nuclear energy, and in turn, the small collection of publicly traded uranium stocks … the uranium ETFs that hold them.

Here, we explore three uranium ETFs. It's a small field – these are three of the most pure-play funds in the space, and they still collectively represent just over $5 billion in assets. But the best ETFs in the uranium space can provide a few different types of exposure to this rocketing commodity.

Data is as of February 7. Yields represent the trailing 12-month yield, which is a standard measure for equity funds.

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Global X Uranium ETF

Assets under management: $3.0 billion
Dividend yield: 5.5%
Expenses: 0.69%, or $69 annually for every $10,000 invested

The Global X Uranium ETF (URA, $31.30) is the largest uranium-focused ETF on the market, at $3.0 billion in assets under management. Those assets have soared in recent years, mind you – URA claimed just over $100 million in AUM during the COVID lows before gobbling up assets in more recent years.

URA provides comprehensive exposure to the niche uranium industry, with its portfolio of 48 stocks spanning miners, refiners, and manufacturers of equipment for both uranium companies and nuclear-facility firms.

Concentration risk is often a factor in smaller industry and thematic funds, and that's absolutely the case for URA. For one, producer Cameco (CCJ) makes up 22% of the uranium ETF's assets. And the top five holdings – which include Canada's NexGen Energy (NXE) and Kazakhstan's Kazatomprom, the world's largest uranium producer – make up roughly two-thirds of URA's weight.

Indeed, Global X Uranium ETF's holdings are almost entirely made up of international stocks. Canada accounts for a little less than half of net assets, followed by Australia (18%) and South Korea (12%). The U.S. is weighted at just 10%.

Interestingly, despite URA's focus on uranium miners, it actually has some exposure to physical uranium via a 9.7% weight in the Sprott Physical Uranium Trust – a Toronto Stock Exchange-listed ETF that currently holds 61.7 million pounds of uranium.

Learn more about URA at the Global X provider site.

Sprott Uranium Miners ETF

Assets under management: $2.0 billion
Dividend yield: 0.0%
Expenses: 0.83%

While you can't invest directly in Sprott's physical uranium ETF in the U.S., you can buy its mining ETF – the Sprott Uranium Miners ETF (URNM, $56.75). URNM, for the record, was the North Shore Global Uranium Mining ETF until 2022, when Sprott acquired and reorganized the assets.

Sprott Uranium Miners ETF primarily focuses on companies involved in uranium mining, although it also will invest in companies that hold the physical element, own uranium royalties, or are otherwise involved in the uranium industry.

This is another concentrated, mostly international portfolio with just 37 holdings at present. It's mighty top-heavy too, though the exposure is spread around a little bit more at the very top than URA. Namely, Cameco is near the top at 13.5%, but Kazatomprom makes up 13.7%, and the Sprott Physical Uranium Trust is another 14.5%.

The uranium ETF's top five holdings are rounded out with Canada's NexGen Energy, as well as Australian production firm Paladin Energy (PALAF).

Like URA, URNM has seen its assets explode in 2021, to $2 billion today from roughly $48 million at the end of 2020.

Learn more about URNM at the Sprott provider site.

VanEck Uranium+Nuclear Energy ETF

Assets under management: $157.9 million
Dividend yield: 4.3%
Expenses: 0.61%

The VanEck Uranium+Nuclear Energy ETF (NLR, $77.81) simply hasn't caught on like the other two uranium ETFs on this list. Yes, assets have surged since the COVID bear-market trench … but that still only has it at a wee $158 million in assets.

What gives?

The VanEck Uranium+Nuclear Energy ETF is a lesson in the importance of "checking under the hood." The name would seem to imply similar exposure to either URA or URNM. And so would its description (from VanEck):

VanEck Uranium+Nuclear Energy ETF (NLR) seeks to replicate as closely as possible, before fees and expenses, the price and yield performance of the MVIS Global Uranium & Nuclear Energy Index (MVNLRTR), which is intended to track the overall performance of companies involved in: (i) uranium mining or uranium mining projects that have the potential, in MV Index Solutions GmbH's (the "Index Provider") view, when such projects are developed are expected to generate at least 50% of a company's revenues or are expected to constitute at least 50% of such company's assets; (ii) the construction, engineering and maintenance of nuclear power facilities and nuclear reactors; (iii) the production of electricity from nuclear sources; or (iv) providing equipment, technology and/or services to the nuclear power industry.

To put the above paragraph a bit more succinctly, the fund invests in miners, nuclear facilities builders, nuclear power companies and associated firms.

In other words, this fund sounds a lot like URA.

A closer look at the ETF's meager 28 holdings, however, shows that NLR isn't quite a pure-play on uranium as you might expect – or at least, not how you'd expect. That is, a little more than 40% of the fund is invested in plain ol' utility stocks – companies such as Constellation Energy (CEG), Public Service Enterprise Group (PEG) and PG&E (PCG).

And although they do indeed have ties to uranium – all three utilities produce electricity from a collective 27 nuclear plants – their businesses simply aren't positioned to benefit from spikes in uranium prices the same way that uranium miners and several other related companies are.

To wit: Over the past three years, NLR has only mustered a 69% total return (price change plus dividends) amid uranium's rise. URA is up 118% in that same time frame, while URNM has jumped by 170%.

Learn more about NLR at the VanEck provider site.