Exchange Traded Funds (ETFs)

Invest in a Growing Energy Trend

When investors talk or think about energy stocks, they likely consider traditional commodity investments, such as oil, natural gas producers and refiners.

However, those companies don’t tend to excite investors or spur thoughts of exponential growth. One alternative energy that is currently seeing some time in the limelight is nuclear.

It is considered a relatively clean energy, and in the United States, both parties are warming to the idea as a long-term solution to the nation’s energy woes. In recent days, prices of uranium have also been driven up as a result of the war in Ukraine.

There are not many options on the exchange-traded fund (ETF) market to allow investors to target this specific theme, but one is Global X Uranium ETF (URA). The investment thesis for this fund is precisely what it sounds like. URA holds companies involved in uranium mining as well as the production of other components of the nuclear energy process. It is a strategy for those who believe nuclear energy is the way of the future.

This fund has performed impressively of late. Its one-year return sits at 30.95%, including a more than 10% gain in the last month which came on the heels of a more than 10% spike in just a few trading days in late February after Russia invaded Ukraine. The stark price changes are plain to see in the chart below.

This fund holds just under $2 billion in assets. The expense ratio of 0.69% is not cheap, but that is par for the course with highly specific ETFs. URA pays only a small dividend of 0.41%.

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Among the fund’s 49 holdings, the largest by far is Cameco Corp., at 25.01% of assets. Other significant investments include Sprott Physical Uranium Trust, 7.00%; Nexgen Energy Ltd., 5.68%; and Paladin Energy Ltd., 3.85%.

For investors seeking to invest in an alternative energy source that has recently come into favor, Global X Uranium ETF (URA) may be the right investment at the right time.

As always, I am happy to answer any of your questions about ETFs, so do not hesitate to send me an email. You just may see your question answered in a future ETF Talk.

Jim Woods

Jim Woods is a 20-plus-year veteran of the markets with varied experience as a broker, hedge fund trader, financial writer, author and newsletter editor. Jim is the editor of Successful Investing, the Bullseye Stock Trader, and The Deep Woods (formerly the Weekly ETF Report). His books include co-authoring, “Billion Dollar Green: Profit from the Eco Revolution,” and “The Wealth Shield: How to Invest and Protect Your Money from Another Stock Market Crash, Financial Crisis or Global Economic Collapse.” He’s also ghostwritten many books and articles, as well as edited content for some of the investment industry’s biggest luminaries. His articles have appeared on many leading financial websites, including StockInvestor.com, InvestorPlace.com, Main Street Investor, MarketWatch, Street Authority, Human Events and many others. Jim formerly worked with Investor’s Business Daily founder William J. O’Neil, helping to author training courses in the CANSLIM stock-picking methodology. The independent firm TipRanks rates Jim the No. 3 financial blogger in the world (out of more than 6,000). TipRanks calculates that, since 2012, he's made 361 successful recommendations out of 499 total, earning a success rate of 72% and a +15.3% average return per recommendation. He is known in professional and personal circles as “The Renaissance Man,” because his expertise includes such varied fields as composing and performing music; Western horsemanship, combat marksmanship, martial arts, auto racing and bodybuilding. Jim holds a BA in philosophy from the University of California, Los Angeles, and is a former U.S. Army paratrooper. A self-described “radical for capitalism,” he celebrates the virtue of making money from his Southern California horse ranch.