Why Nuclear Energy Could be an Investment to Keep an Eye On

shutterstock_156490745

From the moment Prometheus stole fire from the gods and presented it to us, humanity has been concerned with how to fuel our need for energy. One contested, yet efficient and effective, energy source is nuclear power. Approximately 13% of the world’s energy needs currently are met by nuclear power plants, with leading users including Finland, Japan, South Korea, Switzerland and Ukraine. France gets three-quarters of its electricity from nuclear reactors. Uranium is the fuel used in conventional nuclear reactors, and the Global X Uranium ETF (URA) is the exchange-traded fund (ETF) that tracks stocks in the uranium industry.

URA seeks to provide results, before fees and expenses, which correspond generally to the price and yield performance of an index designed to measure the broad-based equity market performance of global companies involved in the uranium industry. The non-diversified fund invests at least 80% of its assets in the securities of the underlying index.

Similar to other commodities, the price of uranium can be highly volatile. URA gained 135% in 2013, but that surge stemmed from prices sinking in November and December 2012, before they recovered sharply in February 2013. Since then, URA has followed a generally downward trend, albeit with periodic rises. Like much of the rest of the market, URA has been down in the first few trading days of 2014.

URA_010814

Focused on a commodity which is largely mined, URA is mostly invested in the basic materials sector, with 90.50% of its assets residing there. It also has some investment in the industrials and technology sectors. The top 10 holdings account for 78.51% of the fund’s assets. These top holdings include Cameco Corp., 23.03%; Uranium Participation, 10.34%; Denison Mines Corp., 9.58%; Areva, 6.24%; and Paladin Energy Ltd., 6.21%.

Exclusive  The Best New Ideas for Growing Your Portfolio with ETF Investments

Although energy commodities are highly volatile, due partly to the geopolitical fears of terrorism and the possible meltdown of nuclear reactors, there is additional volatility in the uranium markets. Making profits in this sector is highly dependent on getting the timing right. When you hear about news that makes uranium seem attractive to buy, one way to invest in the commodity is Global X Uranium ETF (URA).

If you want my advice about buying and selling specific ETFs, including appropriate stop losses, please consider subscribing to my Successful Investing newsletter. As always, I am happy to answer any of your questions about ETFs, so do not hesitate to send me an e-mail. You just may see your question answered in a future ETF Talk.

In case you missed them, read my commodities-focused e-letters from previous weeks about commodities fund GSG and soybean fund SOYB. I also invite you to comment about my column in the space provided below.

Like This Article?
Now Get Doug's FREE Special Report:
The New Gold Rush of 2016-2017

With gold already up 20% in 2016, one of the best market timers in the business sees even bigger things ahead. His free special report will show you how to play the coming “gold rush” for serious profits.

Get Access to the Report, 100% FREE


img
previous article

There’s only been five days of trading so far in 2014, but for emerging market equities and for China, the year has gotten off to a very bad start.

PREMIUM SERVICES FOR INVESTORS

Dr. Mark Skousen

Named one of the "Top 20 Living Economists," Dr. Skousen publishes 4 different investment newsletter advisories, including the award-winning Forecasts & Strategies, which has beaten the market over the last 15 years.

Product Details

  • Forecasts & Strategies
  • Skousen High Income Alert
  • Fast Money Alert
  • Five Star Trader
About Mark Skousen

Bryan Perry

A former Wall Street financial advisor with three decades' experience, Bryan Perry focuses his efforts on high-yield income investing and quick-hitting options plays. Bryan's four newsletter and trading services include:

Product Details

  • Cash Machine
  • Premium Income (exclusively for subscribers of Cash Machine)
  • Quick Income Trader
  • Instant Income Trader
About Bryan Perry

Nicholas Vardy

A Stanford and Harvard Law graduate, Nicholas Vardy scours over 40 different global markets every day to uncover new profit opportunities for subscribers. His 3 advisories and trading services include:

Product Details

  • The Alpha Investor Letter
  • Bull Market Alert
  • Alpha Algorithm
About Nicholas Vardy

Doug Fabian

A 30-year Wall Street veteran and famed market timer, Doug Fabian is one the nation's foremost experts on ETFs (Exchange Traded Funds). His two ETF-focused advisories include:

Product Details

  • Successful ETF Investing
  • ETF Trader's Edge
About Doug Fabian

Bob Carlson

In Bob's monthly newsletter, Retirement Watch, he provides independent, objective research covering all the financial issues of retirement and retirement planning. In addition, Bob serves as Chairman of the Board of Trustees of the Fairfax County (VA) Employees’ Retirement System, which has over $2.8 billion in assets.

Product Details

ABOUT BOB CARLSON

DividendInvestor.com

Used by financial advisors and individual investors all over the world, DividendInvestor.com is the premier provider and one-stop shop for dividend information and research. Popular tools include our proprietary Dividend Calendar, Dividend Calculator, Dividend Score Card, and many more.

Product Details

ABOUT DIVIDENDINVESTOR.COM